Correlation Between Harvest Premium and Harvest Clean

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Can any of the company-specific risk be diversified away by investing in both Harvest Premium and Harvest Clean 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 Premium and Harvest Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harvest Premium Yield and Harvest Clean Energy, you can compare the effects of market volatilities on Harvest Premium and Harvest Clean 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 Premium with a short position of Harvest Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Premium and Harvest Clean.

Diversification Opportunities for Harvest Premium and Harvest Clean

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Harvest and Harvest is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Premium Yield and Harvest Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Clean Energy and Harvest Premium 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 Premium Yield are associated (or correlated) with Harvest Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Clean Energy has no effect on the direction of Harvest Premium i.e., Harvest Premium and Harvest Clean go up and down completely randomly.

Pair Corralation between Harvest Premium and Harvest Clean

Assuming the 90 days trading horizon Harvest Premium Yield is expected to generate 0.6 times more return on investment than Harvest Clean. However, Harvest Premium Yield is 1.65 times less risky than Harvest Clean. It trades about 0.21 of its potential returns per unit of risk. Harvest Clean Energy is currently generating about 0.07 per unit of risk. If you would invest  961.00  in Harvest Premium Yield on November 28, 2024 and sell it today you would earn a total of  32.00  from holding Harvest Premium Yield or generate 3.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Harvest Premium Yield  vs.  Harvest Clean Energy

 Performance 
       Timeline  
Harvest Premium Yield 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Harvest Premium Yield has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Harvest Premium is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Harvest Clean Energy 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Harvest Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Harvest Clean is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Harvest Premium and Harvest Clean Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Harvest Premium and Harvest Clean

The main advantage of trading using opposite Harvest Premium and Harvest Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvest Premium position performs unexpectedly, Harvest Clean 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 Harvest Clean will offset losses from the drop in Harvest Clean's long position.
The idea behind Harvest Premium Yield and Harvest Clean Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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