Correlation Between Harvest Healthcare and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both Harvest Healthcare and IShares SPTSX 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 Healthcare and IShares SPTSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harvest Healthcare Leaders and iShares SPTSX Capped, you can compare the effects of market volatilities on Harvest Healthcare and IShares SPTSX 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 Healthcare with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Healthcare and IShares SPTSX.
Diversification Opportunities for Harvest Healthcare and IShares SPTSX
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harvest and IShares is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Healthcare Leaders and iShares SPTSX Capped in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX Capped and Harvest Healthcare 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 Healthcare Leaders are associated (or correlated) with IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX Capped has no effect on the direction of Harvest Healthcare i.e., Harvest Healthcare and IShares SPTSX go up and down completely randomly.
Pair Corralation between Harvest Healthcare and IShares SPTSX
Assuming the 90 days trading horizon Harvest Healthcare is expected to generate 1.89 times less return on investment than IShares SPTSX. But when comparing it to its historical volatility, Harvest Healthcare Leaders is 1.15 times less risky than IShares SPTSX. It trades about 0.08 of its potential returns per unit of risk. iShares SPTSX Capped is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,259 in iShares SPTSX Capped on August 26, 2024 and sell it today you would earn a total of 1,071 from holding iShares SPTSX Capped or generate 25.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harvest Healthcare Leaders vs. iShares SPTSX Capped
Performance |
| Timeline |
| Harvest Healthcare |
| iShares SPTSX Capped |
Harvest Healthcare and IShares SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harvest Healthcare and IShares SPTSX
The main advantage of trading using opposite Harvest Healthcare and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvest Healthcare position performs unexpectedly, IShares SPTSX 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 IShares SPTSX will offset losses from the drop in IShares SPTSX's long position.| Harvest Healthcare vs. BMO Covered Call | Harvest Healthcare vs. First Asset Tech | Harvest Healthcare vs. Harvest Equal Weight | Harvest Healthcare vs. First Asset Energy |
| IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares Global Healthcare | IShares SPTSX vs. iShares Global Real | IShares SPTSX vs. iShares SPTSX Capped |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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