Correlation Between IShares Core and Harvest Balanced

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

By analyzing existing cross correlation between iShares Core Balanced and Harvest Balanced Income, you can compare the effects of market volatilities on IShares Core and Harvest Balanced 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 IShares Core with a short position of Harvest Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Harvest Balanced.

Diversification Opportunities for IShares Core and Harvest Balanced

0.0

Correlation Coefficient

IShares Core  Harvest Balanced

Pay attention - limited upside

The 3 months correlation between IShares and Harvest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Balanced and Harvest Balanced Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Balanced Income and IShares Core 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 iShares Core Balanced are associated (or correlated) with Harvest Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Balanced Income has no effect on the direction of IShares Core i.e., IShares Core and Harvest Balanced go up and down completely randomly.

Pair Corralation between IShares Core and Harvest Balanced

If you would invest  2,366  in Harvest Balanced Income on December 31, 2024 and sell it today you would earn a total of  13.00  from holding Harvest Balanced Income or generate 0.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

iShares Core Balanced  vs.  Harvest Balanced Income

iShares Core Balanced

Risk-Adjusted Performance

Weak

Over the last 90 days iShares Core Balanced has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IShares Core is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Harvest Balanced Income

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Balanced Income are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Harvest Balanced is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IShares Core and Harvest Balanced

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

The idea behind iShares Core Balanced and Harvest Balanced Income 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.