Correlation Between MicroSectors FANG and Harbor ETF
Can any of the company-specific risk be diversified away by investing in both MicroSectors FANG and Harbor ETF 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 MicroSectors FANG and Harbor ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroSectors FANG Index and Harbor ETF Trust, you can compare the effects of market volatilities on MicroSectors FANG and Harbor ETF 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 MicroSectors FANG with a short position of Harbor ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors FANG and Harbor ETF.
Diversification Opportunities for MicroSectors FANG and Harbor ETF
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MicroSectors and Harbor is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors FANG Index and Harbor ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor ETF Trust and MicroSectors FANG 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 MicroSectors FANG Index are associated (or correlated) with Harbor ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor ETF Trust has no effect on the direction of MicroSectors FANG i.e., MicroSectors FANG and Harbor ETF go up and down completely randomly.
Pair Corralation between MicroSectors FANG and Harbor ETF
Given the investment horizon of 90 days MicroSectors FANG Index is expected to under-perform the Harbor ETF. In addition to that, MicroSectors FANG is 7.12 times more volatile than Harbor ETF Trust. It trades about -0.11 of its total potential returns per unit of risk. Harbor ETF Trust is currently generating about 0.12 per unit of volatility. If you would invest 1,962 in Harbor ETF Trust on September 2, 2024 and sell it today you would earn a total of 433.00 from holding Harbor ETF Trust or generate 22.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 50.4% |
| Values | Daily Returns |
MicroSectors FANG Index vs. Harbor ETF Trust
Performance |
| Timeline |
| MicroSectors FANG Index |
| Harbor ETF Trust |
MicroSectors FANG and Harbor ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroSectors FANG and Harbor ETF
The main advantage of trading using opposite MicroSectors FANG and Harbor ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors FANG position performs unexpectedly, Harbor ETF 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 ETF will offset losses from the drop in Harbor ETF's long position.| MicroSectors FANG vs. MicroSectors FANG Index | MicroSectors FANG vs. Direxion Daily Semiconductor | MicroSectors FANG vs. Direxion Daily Technology | MicroSectors FANG vs. Direxion Daily SP |
| Harbor ETF vs. MFUT | Harbor ETF vs. Ocean Park International | Harbor ETF vs. The Advisors Inner | Harbor ETF vs. The Advisors Inner |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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