Correlation Between Applied Finance and Harbor Core
Can any of the company-specific risk be diversified away by investing in both Applied Finance and Harbor Core 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 Applied Finance and Harbor Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Harbor Core Bond, you can compare the effects of market volatilities on Applied Finance and Harbor Core 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 Applied Finance with a short position of Harbor Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Harbor Core.
Diversification Opportunities for Applied Finance and Harbor Core
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Applied and Harbor is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Harbor Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Core Bond and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Harbor Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Core Bond has no effect on the direction of Applied Finance i.e., Applied Finance and Harbor Core go up and down completely randomly.
Pair Corralation between Applied Finance and Harbor Core
Assuming the 90 days horizon Applied Finance Explorer is expected to generate 4.68 times more return on investment than Harbor Core. However, Applied Finance is 4.68 times more volatile than Harbor Core Bond. It trades about 0.14 of its potential returns per unit of risk. Harbor Core Bond is currently generating about -0.1 per unit of risk. If you would invest 2,275 in Applied Finance Explorer on August 25, 2024 and sell it today you would earn a total of 103.00 from holding Applied Finance Explorer or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Finance Explorer vs. Harbor Core Bond
Performance |
| Timeline |
| Applied Finance Explorer |
| Harbor Core Bond |
Applied Finance and Harbor Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Finance and Harbor Core
The main advantage of trading using opposite Applied Finance and Harbor Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Harbor Core 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 Core will offset losses from the drop in Harbor Core's long position.| Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
| Harbor Core vs. Ultramid Cap Profund Ultramid Cap | Harbor Core vs. Applied Finance Explorer | Harbor Core vs. Mutual Of America | Harbor Core vs. American Century Etf |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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