Correlation Between Harbor Small and Nationwide Highmark
Can any of the company-specific risk be diversified away by investing in both Harbor Small and Nationwide Highmark 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 Nationwide Highmark 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 Nationwide Highmark Small, you can compare the effects of market volatilities on Harbor Small and Nationwide Highmark 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 Nationwide Highmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Small and Nationwide Highmark.
Diversification Opportunities for Harbor Small and Nationwide Highmark
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Harbor and Nationwide is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Small Cap and Nationwide Highmark Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Highmark Small 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 Nationwide Highmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Highmark Small has no effect on the direction of Harbor Small i.e., Harbor Small and Nationwide Highmark go up and down completely randomly.
Pair Corralation between Harbor Small and Nationwide Highmark
Assuming the 90 days horizon Harbor Small Cap is expected to under-perform the Nationwide Highmark. But the mutual fund apears to be less risky and, when comparing its historical volatility, Harbor Small Cap is 1.06 times less risky than Nationwide Highmark. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Nationwide Highmark Small is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,279 in Nationwide Highmark Small on September 13, 2024 and sell it today you would lose (13.00) from holding Nationwide Highmark Small or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbor Small Cap vs. Nationwide Highmark Small
Performance |
| Timeline |
| Harbor Small Cap |
| Nationwide Highmark Small |
Harbor Small and Nationwide Highmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor Small and Nationwide Highmark
The main advantage of trading using opposite Harbor Small and Nationwide Highmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Small position performs unexpectedly, Nationwide Highmark 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 Nationwide Highmark will offset losses from the drop in Nationwide Highmark's long position.| Harbor Small vs. Harbor Vertible Securities | Harbor Small vs. Harbor Diversified International | Harbor Small vs. Harbor International Fund | Harbor Small vs. Harbor International Small |
| Nationwide Highmark vs. Nationwide Highmark Small | Nationwide Highmark vs. Nationwide Highmark Small | Nationwide Highmark vs. Janus Venture Fund | Nationwide Highmark vs. Hotchkis Wiley Small |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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