Correlation Between Main International and Harmonic
Can any of the company-specific risk be diversified away by investing in both Main International and Harmonic 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 Main International and Harmonic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main International ETF and Harmonic, you can compare the effects of market volatilities on Main International and Harmonic 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 Main International with a short position of Harmonic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main International and Harmonic.
Diversification Opportunities for Main International and Harmonic
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Main and Harmonic is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Main International ETF and Harmonic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmonic and Main 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 Main International ETF are associated (or correlated) with Harmonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmonic has no effect on the direction of Main International i.e., Main International and Harmonic go up and down completely randomly.
Pair Corralation between Main International and Harmonic
Given the investment horizon of 90 days Main International ETF is expected to generate 0.24 times more return on investment than Harmonic. However, Main International ETF is 4.19 times less risky than Harmonic. It trades about 0.01 of its potential returns per unit of risk. Harmonic is currently generating about -0.02 per unit of risk. If you would invest 2,284 in Main International ETF on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Main International ETF or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Main International ETF vs. Harmonic
Performance |
| Timeline |
| Main International ETF |
| Harmonic |
Main International and Harmonic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main International and Harmonic
The main advantage of trading using opposite Main International and Harmonic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main International position performs unexpectedly, Harmonic 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 Harmonic will offset losses from the drop in Harmonic's long position.| Main International vs. ADTRAN Inc | Main International vs. International Business Machines | Main International vs. Integrated Ventures | Main International vs. Harmonic |
| Harmonic vs. NETGEAR | Harmonic vs. Juniper Networks | Harmonic vs. Digi International | Harmonic vs. Clearfield |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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