Correlation Between Matthews International and Harte Hanks
Can any of the company-specific risk be diversified away by investing in both Matthews International and Harte Hanks 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 Matthews International and Harte Hanks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews International and Harte Hanks, you can compare the effects of market volatilities on Matthews International and Harte Hanks 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 Matthews International with a short position of Harte Hanks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews International and Harte Hanks.
Diversification Opportunities for Matthews International and Harte Hanks
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Matthews and Harte is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Matthews International and Harte Hanks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harte Hanks and Matthews 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 Matthews International are associated (or correlated) with Harte Hanks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harte Hanks has no effect on the direction of Matthews International i.e., Matthews International and Harte Hanks go up and down completely randomly.
Pair Corralation between Matthews International and Harte Hanks
Given the investment horizon of 90 days Matthews International is expected to generate 1.67 times more return on investment than Harte Hanks. However, Matthews International is 1.67 times more volatile than Harte Hanks. It trades about 0.27 of its potential returns per unit of risk. Harte Hanks is currently generating about -0.33 per unit of risk. If you would invest 2,314 in Matthews International on August 31, 2024 and sell it today you would earn a total of 721.00 from holding Matthews International or generate 31.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews International vs. Harte Hanks
Performance |
| Timeline |
| Matthews International |
| Harte Hanks |
Matthews International and Harte Hanks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews International and Harte Hanks
The main advantage of trading using opposite Matthews International and Harte Hanks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews International position performs unexpectedly, Harte Hanks 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 Harte Hanks will offset losses from the drop in Harte Hanks' long position.| Matthews International vs. Steel Partners Holdings | Matthews International vs. Compass Diversified | Matthews International vs. Brookfield Business Partners | Matthews International vs. Tejon Ranch Co |
| Harte Hanks vs. FTAI Infrastructure | Harte Hanks vs. Steel Partners Holdings | Harte Hanks vs. Mammoth Energy Services | Harte Hanks vs. Seaboard |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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