Correlation Between Thornburg International and Harbor Mid

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

By analyzing existing cross correlation between Thornburg International Value and Harbor Mid Cap, you can compare the effects of market volatilities on Thornburg International and Harbor Mid 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 Thornburg International with a short position of Harbor Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg International and Harbor Mid.

Diversification Opportunities for Thornburg International and Harbor Mid

-0.74

Correlation Coefficient

Thornburg International  Harbor Mid

Pay attention - limited upside

The 3 months correlation between Thornburg and Harbor is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg International Value and Harbor Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Mid Cap and Thornburg International 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 Thornburg International Value are associated (or correlated) with Harbor Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Mid Cap has no effect on the direction of Thornburg International i.e., Thornburg International and Harbor Mid go up and down completely randomly.

Pair Corralation between Thornburg International and Harbor Mid

Assuming the 90 days horizon Thornburg International Value is expected to under-perform the Harbor Mid. In addition to that, Thornburg International is 1.13 times more volatile than Harbor Mid Cap. It trades about -0.1 of its total potential returns per unit of risk. Harbor Mid Cap is currently generating about 0.08 per unit of volatility. If you would invest  2,752  in Harbor Mid Cap on September 15, 2024 and sell it today you would earn a total of  115.00  from holding Harbor Mid Cap or generate 4.18% return on investment over 90 days.

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

Thornburg International Value  vs.  Harbor Mid Cap

Thornburg International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Harbor Mid Cap

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Mid Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Harbor Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thornburg International and Harbor Mid

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

The idea behind Thornburg International Value and Harbor Mid Cap 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.