Correlation Between Harbor Diversified and Western Asset
Can any of the company-specific risk be diversified away by investing in both Harbor Diversified and Western Asset 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 Western Asset 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 Western Asset Inflation, you can compare the effects of market volatilities on Harbor Diversified and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Diversified and Western Asset.
Diversification Opportunities for Harbor Diversified and Western Asset
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harbor and Western is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Diversified Internation and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Inflation has no effect on the direction of Harbor Diversified i.e., Harbor Diversified and Western Asset go up and down completely randomly.
Pair Corralation between Harbor Diversified and Western Asset
Assuming the 90 days horizon Harbor Diversified International is expected to generate 4.08 times more return on investment than Western Asset. However, Harbor Diversified is 4.08 times more volatile than Western Asset Inflation. It trades about 0.04 of its potential returns per unit of risk. Western Asset Inflation is currently generating about 0.03 per unit of risk. If you would invest 1,173 in Harbor Diversified International on January 13, 2025 and sell it today you would earn a total of 40.00 from holding Harbor Diversified International or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbor Diversified Internation vs. Western Asset Inflation
Performance |
| Timeline |
| Harbor Diversified |
| Western Asset Inflation |
Harbor Diversified and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor Diversified and Western Asset
The main advantage of trading using opposite Harbor Diversified and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Diversified position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Harbor Diversified vs. Victory Diversified Stock | Harbor Diversified vs. Diversified Bond Fund | Harbor Diversified vs. American Funds Conservative | Harbor Diversified vs. Columbia Diversified Equity |
| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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