Correlation Between Barings Emerging and Harbor Diversified
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Harbor Diversified 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 Barings Emerging and Harbor Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Emerging Markets and Harbor Diversified International, you can compare the effects of market volatilities on Barings Emerging and Harbor Diversified 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 Barings Emerging with a short position of Harbor Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Harbor Diversified.
Diversification Opportunities for Barings Emerging and Harbor Diversified
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and HARBOR is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Harbor Diversified Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Diversified and Barings Emerging 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 Barings Emerging Markets are associated (or correlated) with Harbor Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Diversified has no effect on the direction of Barings Emerging i.e., Barings Emerging and Harbor Diversified go up and down completely randomly.
Pair Corralation between Barings Emerging and Harbor Diversified
Assuming the 90 days horizon Barings Emerging is expected to generate 1.19 times less return on investment than Harbor Diversified. But when comparing it to its historical volatility, Barings Emerging Markets is 2.09 times less risky than Harbor Diversified. It trades about 0.07 of its potential returns per unit of risk. Harbor Diversified International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,136 in Harbor Diversified International on August 31, 2024 and sell it today you would earn a total of 129.00 from holding Harbor Diversified International or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Barings Emerging Markets vs. Harbor Diversified Internation
Performance |
| Timeline |
| Barings Emerging Markets |
| Harbor Diversified |
Barings Emerging and Harbor Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Harbor Diversified
The main advantage of trading using opposite Barings Emerging and Harbor Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Harbor Diversified 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 Diversified will offset losses from the drop in Harbor Diversified's long position.| Barings Emerging vs. Alliancebernstein National Municipal | Barings Emerging vs. Nuveen Minnesota Municipal | Barings Emerging vs. T Rowe Price | Barings Emerging vs. The National Tax Free |
| Harbor Diversified vs. Vanguard Total International | Harbor Diversified vs. Vanguard Developed Markets | Harbor Diversified vs. Vanguard Developed Markets | Harbor Diversified vs. HUMANA INC |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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