Correlation Between Northern Lights and Harbor ETF
Can any of the company-specific risk be diversified away by investing in both Northern Lights and Harbor ETF 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 Northern Lights and Harbor ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Lights and Harbor ETF Trust, you can compare the effects of market volatilities on Northern Lights and Harbor ETF 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 Northern Lights with a short position of Harbor ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and Harbor ETF.
Diversification Opportunities for Northern Lights and Harbor ETF
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Northern and Harbor is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights and Harbor ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor ETF Trust and Northern Lights 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 Northern Lights are associated (or correlated) with Harbor ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor ETF Trust has no effect on the direction of Northern Lights i.e., Northern Lights and Harbor ETF go up and down completely randomly.
Pair Corralation between Northern Lights and Harbor ETF
Given the investment horizon of 90 days Northern Lights is expected to generate 1.26 times less return on investment than Harbor ETF. In addition to that, Northern Lights is 1.09 times more volatile than Harbor ETF Trust. It trades about 0.13 of its total potential returns per unit of risk. Harbor ETF Trust is currently generating about 0.17 per unit of volatility. If you would invest 2,013 in Harbor ETF Trust on September 1, 2024 and sell it today you would earn a total of 90.00 from holding Harbor ETF Trust or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.57% |
| Values | Daily Returns |
Northern Lights vs. Harbor ETF Trust
Performance |
| Timeline |
| Northern Lights |
| Harbor ETF Trust |
Northern Lights and Harbor ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Lights and Harbor ETF
The main advantage of trading using opposite Northern Lights and Harbor ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Lights position performs unexpectedly, Harbor ETF 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 Harbor ETF will offset losses from the drop in Harbor ETF's long position.| Northern Lights vs. Sterling Capital Focus | Northern Lights vs. Roundhill ETF Trust | Northern Lights vs. Northern Lights | Northern Lights vs. First Trust Exchange Traded |
| Harbor ETF vs. Vanguard Total Stock | Harbor ETF vs. SPDR SP 500 | Harbor ETF vs. iShares Core SP | Harbor ETF vs. Vanguard Dividend Appreciation |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |