Correlation Between Harbor Health and CHIR

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

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

Diversification Opportunities for Harbor Health and CHIR

0.69

Correlation Coefficient

Harbor Health  CHIR

Poor diversification

The 3 months correlation between Harbor and CHIR is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Health Care and CHIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIR and Harbor Health 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 Health Care are associated (or correlated) with CHIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIR has no effect on the direction of Harbor Health i.e., Harbor Health and CHIR go up and down completely randomly.

Pair Corralation between Harbor Health and CHIR

If you would invest  2,519  in Harbor Health Care on October 25, 2024 and sell it today you would earn a total of  83.80  from holding Harbor Health Care or generate 3.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.26%
Values	Daily Returns

Harbor Health Care  vs.  CHIR

Harbor Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harbor Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Harbor Health is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

CHIR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHIR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, CHIR is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Harbor Health and CHIR

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

The idea behind Harbor Health Care and CHIR 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.