Correlation Between Steel Partners and Harte Hanks

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

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

Diversification Opportunities for Steel Partners and Harte Hanks

0.05

Correlation Coefficient

Steel Partners  Harte Hanks

Significant diversification

The 3 months correlation between Steel and Harte is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Steel Partners Holdings and Harte Hanks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harte Hanks and Steel Partners 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 Steel Partners Holdings 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 Steel Partners i.e., Steel Partners and Harte Hanks go up and down completely randomly.

Pair Corralation between Steel Partners and Harte Hanks

Given the investment horizon of 90 days Steel Partners Holdings is expected to generate 1.12 times more return on investment than Harte Hanks. However, Steel Partners is 1.12 times more volatile than Harte Hanks. It trades about 0.02 of its potential returns per unit of risk. Harte Hanks is currently generating about -0.06 per unit of risk. If you would invest  4,225  in Steel Partners Holdings on December 27, 2024 and sell it today you would earn a total of  26.00  from holding Steel Partners Holdings or generate 0.62% return on investment over 90 days.

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

Steel Partners Holdings  vs.  Harte Hanks

Steel Partners Holdings

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Steel Partners Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable essential indicators, Steel Partners is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Harte Hanks

Risk-Adjusted Performance

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 latest weak performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Steel Partners and Harte Hanks

The main advantage of trading using opposite Steel Partners and Harte Hanks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Partners 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 Steel Partners Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.