Correlation Between Harbor Diversified and Municipal Bond
Can any of the company-specific risk be diversified away by investing in both Harbor Diversified and Municipal Bond 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 Municipal Bond 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 Municipal Bond Fund, you can compare the effects of market volatilities on Harbor Diversified and Municipal Bond 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 Municipal Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Diversified and Municipal Bond.
Diversification Opportunities for Harbor Diversified and Municipal Bond
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harbor and Municipal is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Diversified Internation and Municipal Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Municipal Bond 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 Municipal Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Municipal Bond has no effect on the direction of Harbor Diversified i.e., Harbor Diversified and Municipal Bond go up and down completely randomly.
Pair Corralation between Harbor Diversified and Municipal Bond
Assuming the 90 days horizon Harbor Diversified International is expected to generate 3.75 times more return on investment than Municipal Bond. However, Harbor Diversified is 3.75 times more volatile than Municipal Bond Fund. It trades about 0.06 of its potential returns per unit of risk. Municipal Bond Fund is currently generating about 0.1 per unit of risk. If you would invest 1,115 in Harbor Diversified International on September 12, 2024 and sell it today you would earn a total of 186.00 from holding Harbor Diversified International or generate 16.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Harbor Diversified Internation vs. Municipal Bond Fund
Performance |
| Timeline |
| Harbor Diversified |
| Municipal Bond |
Harbor Diversified and Municipal Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor Diversified and Municipal Bond
The main advantage of trading using opposite Harbor Diversified and Municipal Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Diversified position performs unexpectedly, Municipal Bond 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 Municipal Bond will offset losses from the drop in Municipal Bond's long position.| Harbor Diversified vs. Investec Emerging Markets | Harbor Diversified vs. Franklin Emerging Market | Harbor Diversified vs. Artisan Emerging Markets | Harbor Diversified vs. Transamerica Emerging Markets |
| Municipal Bond vs. Vanguard Long Term Tax Exempt | Municipal Bond vs. Vanguard High Yield Tax Exempt | Municipal Bond vs. Vanguard High Yield Tax Exempt | Municipal Bond vs. Strategic Advisers Municipal |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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