Correlation Between Capital Group and Harbor Scientific
Can any of the company-specific risk be diversified away by investing in both Capital Group and Harbor Scientific 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 Capital Group and Harbor Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Group Municipal and Harbor Scientific Alpha, you can compare the effects of market volatilities on Capital Group and Harbor Scientific 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 Capital Group with a short position of Harbor Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Group and Harbor Scientific.
Diversification Opportunities for Capital Group and Harbor Scientific
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Capital and Harbor is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Capital Group Municipal and Harbor Scientific Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Scientific Alpha and Capital Group 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 Capital Group Municipal are associated (or correlated) with Harbor Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Scientific Alpha has no effect on the direction of Capital Group i.e., Capital Group and Harbor Scientific go up and down completely randomly.
Pair Corralation between Capital Group and Harbor Scientific
Given the investment horizon of 90 days Capital Group Municipal is expected to generate 1.56 times more return on investment than Harbor Scientific. However, Capital Group is 1.56 times more volatile than Harbor Scientific Alpha. It trades about -0.04 of its potential returns per unit of risk. Harbor Scientific Alpha is currently generating about -0.13 per unit of risk. If you would invest 2,733 in Capital Group Municipal on August 25, 2024 and sell it today you would lose (16.00) from holding Capital Group Municipal or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Group Municipal vs. Harbor Scientific Alpha
Performance |
| Timeline |
| Capital Group Municipal |
| Harbor Scientific Alpha |
Capital Group and Harbor Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Group and Harbor Scientific
The main advantage of trading using opposite Capital Group and Harbor Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Group position performs unexpectedly, Harbor Scientific 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 Scientific will offset losses from the drop in Harbor Scientific's long position.| Capital Group vs. BlackRock Intermediate Muni | Capital Group vs. SSGA Active Trust | Capital Group vs. SPDR MarketAxess Investment | Capital Group vs. SSGA Active Trust |
| Harbor Scientific vs. Capital Group Short | Harbor Scientific vs. Capital Group Municipal | Harbor Scientific vs. Capital Group Global | Harbor Scientific vs. Capital Group Dividend |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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