Correlation Between Harvest Brand and Global X
Can any of the company-specific risk be diversified away by investing in both Harvest Brand and Global X 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 Harvest Brand and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harvest Brand Leaders and Global X SPTSX, you can compare the effects of market volatilities on Harvest Brand and Global X 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 Harvest Brand with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Brand and Global X.
Diversification Opportunities for Harvest Brand and Global X
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harvest and Global is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Brand Leaders and Global X SPTSX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SPTSX and Harvest Brand 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 Harvest Brand Leaders are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SPTSX has no effect on the direction of Harvest Brand i.e., Harvest Brand and Global X go up and down completely randomly.
Pair Corralation between Harvest Brand and Global X
Assuming the 90 days trading horizon Harvest Brand is expected to generate 1.33 times less return on investment than Global X. But when comparing it to its historical volatility, Harvest Brand Leaders is 2.53 times less risky than Global X. It trades about 0.09 of its potential returns per unit of risk. Global X SPTSX is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,134 in Global X SPTSX on September 14, 2024 and sell it today you would earn a total of 452.00 from holding Global X SPTSX or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harvest Brand Leaders vs. Global X SPTSX
Performance |
| Timeline |
| Harvest Brand Leaders |
| Global X SPTSX |
Harvest Brand and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harvest Brand and Global X
The main advantage of trading using opposite Harvest Brand and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvest Brand position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Harvest Brand vs. iShares Core SP | Harvest Brand vs. iShares SPTSX Capped | Harvest Brand vs. BMO NASDAQ 100 | Harvest Brand vs. Vanguard SP 500 |
| Global X vs. Harvest Brand Leaders | Global X vs. Harvest Equal Weight | Global X vs. First Asset Energy | Global X vs. Harvest Healthcare Leaders |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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