Correlation Between Harvest Global and Converge Technology
Can any of the company-specific risk be diversified away by investing in both Harvest Global and Converge Technology 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 Global and Converge Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harvest Global REIT and Converge Technology Solutions, you can compare the effects of market volatilities on Harvest Global and Converge Technology 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 Global with a short position of Converge Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Global and Converge Technology.
Diversification Opportunities for Harvest Global and Converge Technology
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harvest and Converge is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Global REIT and Converge Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Technology and Harvest Global 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 Global REIT are associated (or correlated) with Converge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Technology has no effect on the direction of Harvest Global i.e., Harvest Global and Converge Technology go up and down completely randomly.
Pair Corralation between Harvest Global and Converge Technology
Assuming the 90 days trading horizon Harvest Global is expected to generate 7.69 times less return on investment than Converge Technology. But when comparing it to its historical volatility, Harvest Global REIT is 3.47 times less risky than Converge Technology. It trades about 0.07 of its potential returns per unit of risk. Converge Technology Solutions is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 307.00 in Converge Technology Solutions on September 4, 2024 and sell it today you would earn a total of 29.00 from holding Converge Technology Solutions or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Harvest Global REIT vs. Converge Technology Solutions
Performance |
| Timeline |
| Harvest Global REIT |
| Converge Technology |
Harvest Global and Converge Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harvest Global and Converge Technology
The main advantage of trading using opposite Harvest Global and Converge Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvest Global position performs unexpectedly, Converge Technology 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 Converge Technology will offset losses from the drop in Converge Technology's long position.| Harvest Global vs. Harvest Equal Weight | Harvest Global vs. Harvest Brand Leaders | Harvest Global vs. Energy Leaders Plus | Harvest Global vs. Harvest Tech Achievers |
| Converge Technology vs. Dye Durham | Converge Technology vs. Docebo Inc | Converge Technology vs. Topicus | Converge Technology vs. goeasy |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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