Correlation Between Harvest Eli and Harvest Microsoft

Can any of the company-specific risk be diversified away by investing in both Harvest Eli and Harvest Microsoft at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Harvest Eli and Harvest Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harvest Eli Lilly and Harvest Microsoft Enhanced, you can compare the effects of market volatilities on Harvest Eli and Harvest Microsoft and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Harvest Eli with a short position of Harvest Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Eli and Harvest Microsoft.

Diversification Opportunities for Harvest Eli and Harvest Microsoft

-0.46

Correlation Coefficient

Harvest Eli  Harvest Microsoft

Very good diversification

The 3 months correlation between Harvest and Harvest is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Eli Lilly and Harvest Microsoft Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Microsoft and Harvest Eli is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Harvest Eli Lilly are associated (or correlated) with Harvest Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Microsoft has no effect on the direction of Harvest Eli i.e., Harvest Eli and Harvest Microsoft go up and down completely randomly.

Pair Corralation between Harvest Eli and Harvest Microsoft

Assuming the 90 days trading horizon Harvest Eli Lilly is expected to under-perform the Harvest Microsoft. In addition to that, Harvest Eli is 1.8 times more volatile than Harvest Microsoft Enhanced. It trades about -0.08 of its total potential returns per unit of risk. Harvest Microsoft Enhanced is currently generating about 0.13 per unit of volatility. If you would invest  1,103  in Harvest Microsoft Enhanced on September 5, 2024 and sell it today you would earn a total of  129.00  from holding Harvest Microsoft Enhanced or generate 11.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Harvest Eli Lilly  vs.  Harvest Microsoft Enhanced

Harvest Eli Lilly

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harvest Eli Lilly has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Etf's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Harvest Microsoft

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Microsoft Enhanced are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Harvest Microsoft may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Harvest Eli and Harvest Microsoft

The main advantage of trading using opposite Harvest Eli and Harvest Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvest Eli position performs unexpectedly, Harvest Microsoft can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Harvest Microsoft will offset losses from the drop in Harvest Microsoft's long position.

The idea behind Harvest Eli Lilly and Harvest Microsoft Enhanced pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.