Correlation Between Embark Small and Harbor Capital
Can any of the company-specific risk be diversified away by investing in both Embark Small and Harbor Capital 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 Embark Small and Harbor Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embark Small Cap and Harbor Capital Appreciation, you can compare the effects of market volatilities on Embark Small and Harbor Capital 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 Embark Small with a short position of Harbor Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embark Small and Harbor Capital.
Diversification Opportunities for Embark Small and Harbor Capital
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Embark and Harbor is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Embark Small Cap and Harbor Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Capital Appre and Embark Small 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 Embark Small Cap are associated (or correlated) with Harbor Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Capital Appre has no effect on the direction of Embark Small i.e., Embark Small and Harbor Capital go up and down completely randomly.
Pair Corralation between Embark Small and Harbor Capital
Assuming the 90 days horizon Embark Small Cap is expected to generate 1.3 times more return on investment than Harbor Capital. However, Embark Small is 1.3 times more volatile than Harbor Capital Appreciation. It trades about 0.35 of its potential returns per unit of risk. Harbor Capital Appreciation is currently generating about 0.31 per unit of risk. If you would invest 1,076 in Embark Small Cap on September 1, 2024 and sell it today you would earn a total of 103.00 from holding Embark Small Cap or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embark Small Cap vs. Harbor Capital Appreciation
Performance |
| Timeline |
| Embark Small Cap |
| Harbor Capital Appre |
Embark Small and Harbor Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embark Small and Harbor Capital
The main advantage of trading using opposite Embark Small and Harbor Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embark Small position performs unexpectedly, Harbor Capital 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 Capital will offset losses from the drop in Harbor Capital's long position.| Embark Small vs. James Balanced Golden | Embark Small vs. Goldman Sachs Clean | Embark Small vs. Goldman Sachs Esg | Embark Small vs. Sprott Gold Equity |
| Harbor Capital vs. Harbor International Fund | Harbor Capital vs. Dodge Stock Fund | Harbor Capital vs. Total Return Fund | Harbor Capital vs. Europacific Growth Fund |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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