Correlation Between Global Strategist and Harbor Capital

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

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

Diversification Opportunities for Global Strategist and Harbor Capital

0.39

Correlation Coefficient

Global Strategist  Harbor Capital

Weak diversification

The 3 months correlation between Global and Harbor is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Global Strategist Portfolio and Harbor Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Capital Appre and Global Strategist 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 Global Strategist Portfolio are associated (or correlated) with Harbor Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Capital Appre has no effect on the direction of Global Strategist i.e., Global Strategist and Harbor Capital go up and down completely randomly.

Pair Corralation between Global Strategist and Harbor Capital

Assuming the 90 days horizon Global Strategist is expected to generate 6.07 times less return on investment than Harbor Capital. But when comparing it to its historical volatility, Global Strategist Portfolio is 2.43 times less risky than Harbor Capital. It trades about 0.07 of its potential returns per unit of risk. Harbor Capital Appreciation is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  11,607  in Harbor Capital Appreciation on September 12, 2024 and sell it today you would earn a total of  1,240  from holding Harbor Capital Appreciation or generate 10.68% return on investment over 90 days.

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

Global Strategist Portfolio  vs.  Harbor Capital Appreciation

Global Strategist

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Strategist Portfolio are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Global Strategist is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Harbor Capital Appre

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Capital Appreciation are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Harbor Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Global Strategist and Harbor Capital

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

The idea behind Global Strategist Portfolio and Harbor Capital Appreciation 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.

Check out your portfolio center.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.