Correlation Between Little Harbor and Cboe Validus

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

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

Diversification Opportunities for Little Harbor and Cboe Validus

0.0

Correlation Coefficient

Little Harbor  Cboe Validus

Pay attention - limited upside

The 3 months correlation between Little and Cboe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Little Harbor Advisors and Cboe Validus SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cboe Validus SP and Little Harbor 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 Little Harbor Advisors are associated (or correlated) with Cboe Validus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cboe Validus SP has no effect on the direction of Little Harbor i.e., Little Harbor and Cboe Validus go up and down completely randomly.

Pair Corralation between Little Harbor and Cboe Validus

If you would invest (100.00) in Little Harbor Advisors on December 26, 2024 and sell it today you would earn a total of  100.00  from holding Little Harbor Advisors or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Little Harbor Advisors  vs.  Cboe Validus SP

Little Harbor Advisors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Little Harbor Advisors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Little Harbor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cboe Validus SP

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cboe Validus SP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Cboe Validus is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Little Harbor and Cboe Validus

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

The idea behind Little Harbor Advisors and Cboe Validus SP 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.