Correlation Between Harte Hanks and Steel Partners
Can any of the company-specific risk be diversified away by investing in both Harte Hanks and Steel Partners 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 Harte Hanks and Steel Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harte Hanks and Steel Partners Holdings, you can compare the effects of market volatilities on Harte Hanks and Steel Partners 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 Harte Hanks with a short position of Steel Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harte Hanks and Steel Partners.
Diversification Opportunities for Harte Hanks and Steel Partners
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harte and Steel is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Harte Hanks and Steel Partners Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Partners Holdings and Harte Hanks 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 Harte Hanks are associated (or correlated) with Steel Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Partners Holdings has no effect on the direction of Harte Hanks i.e., Harte Hanks and Steel Partners go up and down completely randomly.
Pair Corralation between Harte Hanks and Steel Partners
Considering the 90-day investment horizon Harte Hanks is expected to under-perform the Steel Partners. But the stock apears to be less risky and, when comparing its historical volatility, Harte Hanks is 1.38 times less risky than Steel Partners. The stock trades about -0.34 of its potential returns per unit of risk. The Steel Partners Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,049 in Steel Partners Holdings on August 27, 2024 and sell it today you would earn a total of 56.00 from holding Steel Partners Holdings or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harte Hanks vs. Steel Partners Holdings
Performance |
| Timeline |
| Harte Hanks |
| Steel Partners Holdings |
Harte Hanks and Steel Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harte Hanks and Steel Partners
The main advantage of trading using opposite Harte Hanks and Steel Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harte Hanks position performs unexpectedly, Steel Partners 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 Steel Partners will offset losses from the drop in Steel Partners' long position.| Harte Hanks vs. FTAI Infrastructure | Harte Hanks vs. Steel Partners Holdings | Harte Hanks vs. Mammoth Energy Services | Harte Hanks vs. Seaboard |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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