Correlation Between Acm Tactical and Harbor Small

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

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

Diversification Opportunities for Acm Tactical and Harbor Small

0.43

Correlation Coefficient

Acm Tactical  Harbor Small

Very weak diversification

The 3 months correlation between Acm and Harbor is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Acm Tactical Income and Harbor Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Small Cap and Acm Tactical 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 Acm Tactical Income are associated (or correlated) with Harbor Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Small Cap has no effect on the direction of Acm Tactical i.e., Acm Tactical and Harbor Small go up and down completely randomly.

Pair Corralation between Acm Tactical and Harbor Small

Assuming the 90 days horizon Acm Tactical Income is expected to generate 0.14 times more return on investment than Harbor Small. However, Acm Tactical Income is 7.11 times less risky than Harbor Small. It trades about 0.16 of its potential returns per unit of risk. Harbor Small Cap is currently generating about -0.04 per unit of risk. If you would invest  894.00  in Acm Tactical Income on September 11, 2024 and sell it today you would earn a total of  4.00  from holding Acm Tactical Income or generate 0.45% return on investment over 90 days.

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

Acm Tactical Income  vs.  Harbor Small Cap

Acm Tactical Income

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Acm Tactical Income are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Acm Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Harbor Small Cap

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Small Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Harbor Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Acm Tactical and Harbor Small

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

The idea behind Acm Tactical Income and Harbor Small 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.