Correlation Between Harbor Small and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Harbor Small and Stone Harbor 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 Small and Stone Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harbor Small Cap and Stone Harbor Emerging, you can compare the effects of market volatilities on Harbor Small and Stone Harbor 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 Small with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Small and Stone Harbor.
Diversification Opportunities for Harbor Small and Stone Harbor
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Harbor and Stone is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Small Cap and Stone Harbor Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Emerging and Harbor Small 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 Small Cap are associated (or correlated) with Stone Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Harbor Emerging has no effect on the direction of Harbor Small i.e., Harbor Small and Stone Harbor go up and down completely randomly.
Pair Corralation between Harbor Small and Stone Harbor
Assuming the 90 days horizon Harbor Small Cap is expected to generate 2.95 times more return on investment than Stone Harbor. However, Harbor Small is 2.95 times more volatile than Stone Harbor Emerging. It trades about 0.07 of its potential returns per unit of risk. Stone Harbor Emerging is currently generating about 0.12 per unit of risk. If you would invest 1,085 in Harbor Small Cap on September 12, 2024 and sell it today you would earn a total of 466.00 from holding Harbor Small Cap or generate 42.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbor Small Cap vs. Stone Harbor Emerging
Performance |
| Timeline |
| Harbor Small Cap |
| Stone Harbor Emerging |
Harbor Small and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor Small and Stone Harbor
The main advantage of trading using opposite Harbor Small and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Small position performs unexpectedly, Stone Harbor 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 Stone Harbor will offset losses from the drop in Stone Harbor's long position.| Harbor Small vs. Needham Aggressive Growth | Harbor Small vs. Ultramid Cap Profund Ultramid Cap | Harbor Small vs. HUMANA INC | Harbor Small vs. Barloworld Ltd ADR |
| Stone Harbor vs. Blackrock Sm Cap | Stone Harbor vs. Tiaa Cref Small Cap Blend | Stone Harbor vs. Pgim Jennison Diversified | Stone Harbor vs. Western Asset Diversified |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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