Correlation Between MDU Resources and Harte Hanks

Can any of the company-specific risk be diversified away by investing in both MDU Resources and Harte Hanks 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 MDU Resources and Harte Hanks into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MDU Resources Group and Harte Hanks, you can compare the effects of market volatilities on MDU Resources and Harte Hanks 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 MDU Resources with a short position of Harte Hanks. Check out your portfolio center. Please also check ongoing floating volatility patterns of MDU Resources and Harte Hanks.

Diversification Opportunities for MDU Resources and Harte Hanks

0.31

Correlation Coefficient

MDU Resources  Harte Hanks

Weak diversification

The 3 months correlation between MDU and Harte is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding MDU Resources Group and Harte Hanks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harte Hanks and MDU Resources 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 MDU Resources Group are associated (or correlated) with Harte Hanks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harte Hanks has no effect on the direction of MDU Resources i.e., MDU Resources and Harte Hanks go up and down completely randomly.

Pair Corralation between MDU Resources and Harte Hanks

Considering the 90-day investment horizon MDU Resources Group is expected to generate 0.56 times more return on investment than Harte Hanks. However, MDU Resources Group is 1.8 times less risky than Harte Hanks. It trades about -0.08 of its potential returns per unit of risk. Harte Hanks is currently generating about -0.07 per unit of risk. If you would invest  1,819  in MDU Resources Group on December 26, 2024 and sell it today you would lose (141.00) from holding MDU Resources Group or give up 7.75% of portfolio value over 90 days.

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

MDU Resources Group  vs.  Harte Hanks

MDU Resources Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days MDU Resources Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Harte Hanks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harte Hanks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with MDU Resources and Harte Hanks

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

The idea behind MDU Resources Group and Harte Hanks 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.