Correlation Between Harbor Diversified and Dunham High
Can any of the company-specific risk be diversified away by investing in both Harbor Diversified and Dunham High 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 Harbor Diversified and Dunham High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harbor Diversified International and Dunham High Yield, you can compare the effects of market volatilities on Harbor Diversified and Dunham High 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 Harbor Diversified with a short position of Dunham High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Diversified and Dunham High.
Diversification Opportunities for Harbor Diversified and Dunham High
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between HARBOR and Dunham is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Diversified Internation and Dunham High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham High Yield and Harbor Diversified 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 Harbor Diversified International are associated (or correlated) with Dunham High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham High Yield has no effect on the direction of Harbor Diversified i.e., Harbor Diversified and Dunham High go up and down completely randomly.
Pair Corralation between Harbor Diversified and Dunham High
Assuming the 90 days horizon Harbor Diversified International is expected to generate 3.86 times more return on investment than Dunham High. However, Harbor Diversified is 3.86 times more volatile than Dunham High Yield. It trades about 0.09 of its potential returns per unit of risk. Dunham High Yield is currently generating about 0.22 per unit of risk. If you would invest 1,082 in Harbor Diversified International on September 4, 2024 and sell it today you would earn a total of 208.00 from holding Harbor Diversified International or generate 19.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Harbor Diversified Internation vs. Dunham High Yield
Performance |
| Timeline |
| Harbor Diversified |
| Dunham High Yield |
Harbor Diversified and Dunham High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor Diversified and Dunham High
The main advantage of trading using opposite Harbor Diversified and Dunham High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Diversified position performs unexpectedly, Dunham High 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 Dunham High will offset losses from the drop in Dunham High's long position.The idea behind Harbor Diversified International and Dunham High Yield pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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