Correlation Between Abrdn Physical and Harbor Energy

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

By analyzing existing cross correlation between abrdn Physical Silver and Harbor Energy Transition, you can compare the effects of market volatilities on Abrdn Physical and Harbor Energy 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 Abrdn Physical with a short position of Harbor Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Physical and Harbor Energy.

Diversification Opportunities for Abrdn Physical and Harbor Energy

-0.34

Correlation Coefficient

Abrdn Physical  Harbor Energy

Very good diversification

The 3 months correlation between Abrdn and Harbor is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Physical Silver and Harbor Energy Transition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Energy Transition and Abrdn Physical 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 abrdn Physical Silver are associated (or correlated) with Harbor Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Energy Transition has no effect on the direction of Abrdn Physical i.e., Abrdn Physical and Harbor Energy go up and down completely randomly.

Pair Corralation between Abrdn Physical and Harbor Energy

Given the investment horizon of 90 days abrdn Physical Silver is expected to under-perform the Harbor Energy. But the etf apears to be less risky and, when comparing its historical volatility, abrdn Physical Silver is 1.22 times less risky than Harbor Energy. The etf trades about -0.2 of its potential returns per unit of risk. The Harbor Energy Transition is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  1,257  in Harbor Energy Transition on October 12, 2024 and sell it today you would earn a total of  66.00  from holding Harbor Energy Transition or generate 5.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.0%
Values	Daily Returns

abrdn Physical Silver  vs.  Harbor Energy Transition

abrdn Physical Silver

Risk-Adjusted Performance

0 of 100

Very Weak

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

Harbor Energy Transition

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Harbor Energy Transition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly inconsistent basic indicators, Harbor Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Abrdn Physical and Harbor Energy

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

The idea behind abrdn Physical Silver and Harbor Energy Transition 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.