Correlation Between Harbor International and Western Asset
Can any of the company-specific risk be diversified away by investing in both Harbor International 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 International 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 International Fund and Western Asset E, you can compare the effects of market volatilities on Harbor International 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 International with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor International and Western Asset.
Diversification Opportunities for Harbor International and Western Asset
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harbor and Western is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Harbor International Fund and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E and Harbor International 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 International Fund 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 E has no effect on the direction of Harbor International i.e., Harbor International and Western Asset go up and down completely randomly.
Pair Corralation between Harbor International and Western Asset
Assuming the 90 days horizon Harbor International Fund is expected to under-perform the Western Asset. In addition to that, Harbor International is 2.65 times more volatile than Western Asset E. It trades about -0.08 of its total potential returns per unit of risk. Western Asset E is currently generating about -0.11 per unit of volatility. If you would invest 941.00 in Western Asset E on August 28, 2024 and sell it today you would lose (21.00) from holding Western Asset E or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbor International Fund vs. Western Asset E
Performance |
| Timeline |
| Harbor International |
| Western Asset E |
Harbor International and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor International and Western Asset
The main advantage of trading using opposite Harbor International and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor International 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 International vs. Harbor Vertible Securities | Harbor International vs. Harbor International Small | Harbor International vs. Harbor Mid Cap | Harbor International vs. Harbor Mid Cap |
| Western Asset vs. Fidelity Capital Income | Western Asset vs. Siit High Yield | Western Asset vs. Dunham High Yield | Western Asset vs. Pace High Yield |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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