Correlation Between Harbor ETF and SPDR Kensho

Can any of the company-specific risk be diversified away by investing in both Harbor ETF and SPDR Kensho 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 Harbor ETF and SPDR Kensho into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harbor ETF Trust and SPDR Kensho Future, you can compare the effects of market volatilities on Harbor ETF and SPDR Kensho 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 Harbor ETF with a short position of SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor ETF and SPDR Kensho.

Diversification Opportunities for Harbor ETF and SPDR Kensho

0.86

Correlation Coefficient

Harbor ETF  SPDR Kensho

Very poor diversification

The 3 months correlation between Harbor and SPDR is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Harbor ETF Trust and SPDR Kensho Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho Future and Harbor ETF 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 Harbor ETF Trust are associated (or correlated) with SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho Future has no effect on the direction of Harbor ETF i.e., Harbor ETF and SPDR Kensho go up and down completely randomly.

Pair Corralation between Harbor ETF and SPDR Kensho

Given the investment horizon of 90 days Harbor ETF is expected to generate 4.08 times less return on investment than SPDR Kensho. But when comparing it to its historical volatility, Harbor ETF Trust is 2.35 times less risky than SPDR Kensho. It trades about 0.11 of its potential returns per unit of risk. SPDR Kensho Future is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  5,938  in SPDR Kensho Future on September 15, 2024 and sell it today you would earn a total of  850.00  from holding SPDR Kensho Future or generate 14.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Harbor ETF Trust  vs.  SPDR Kensho Future

Harbor ETF Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor ETF Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Harbor ETF is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

SPDR Kensho Future

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Kensho Future are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, SPDR Kensho unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harbor ETF and SPDR Kensho

The main advantage of trading using opposite Harbor ETF and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor ETF position performs unexpectedly, SPDR Kensho 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 SPDR Kensho will offset losses from the drop in SPDR Kensho's long position.

The idea behind Harbor ETF Trust and SPDR Kensho Future 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.