Correlation Between Seaboard and Harte Hanks

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

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

Diversification Opportunities for Seaboard and Harte Hanks

0.8

Correlation Coefficient

Seaboard  Harte Hanks

Very poor diversification

The 3 months correlation between Seaboard and Harte is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Seaboard and Harte Hanks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harte Hanks and Seaboard 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 Seaboard 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 Seaboard i.e., Seaboard and Harte Hanks go up and down completely randomly.

Pair Corralation between Seaboard and Harte Hanks

Considering the 90-day investment horizon Seaboard is expected to generate 0.55 times more return on investment than Harte Hanks. However, Seaboard is 1.83 times less risky than Harte Hanks. It trades about -0.22 of its potential returns per unit of risk. Harte Hanks is currently generating about -0.14 per unit of risk. If you would invest  314,740  in Seaboard on September 2, 2024 and sell it today you would lose (53,342) from holding Seaboard or give up 16.95% of portfolio value over 90 days.

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

Seaboard  vs.  Harte Hanks

Seaboard

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seaboard has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Harte Hanks

Risk-Adjusted Performance

0 of 100

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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Seaboard and Harte Hanks

The main advantage of trading using opposite Seaboard and Harte Hanks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seaboard 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 Seaboard 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.