Correlation Between Harbor Health and First Trust
Can any of the company-specific risk be diversified away by investing in both Harbor Health and First Trust 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 Health and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harbor Health Care and First Trust Exchange Traded, you can compare the effects of market volatilities on Harbor Health and First Trust 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 Health with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Health and First Trust.
Diversification Opportunities for Harbor Health and First Trust
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Harbor and First is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Health Care and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange and Harbor Health 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 Health Care are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Exchange has no effect on the direction of Harbor Health i.e., Harbor Health and First Trust go up and down completely randomly.
Pair Corralation between Harbor Health and First Trust
Given the investment horizon of 90 days Harbor Health Care is expected to under-perform the First Trust. In addition to that, Harbor Health is 1.7 times more volatile than First Trust Exchange Traded. It trades about -0.08 of its total potential returns per unit of risk. First Trust Exchange Traded is currently generating about -0.05 per unit of volatility. If you would invest 2,151 in First Trust Exchange Traded on August 28, 2024 and sell it today you would lose (17.00) from holding First Trust Exchange Traded or give up 0.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbor Health Care vs. First Trust Exchange Traded
Performance |
| Timeline |
| Harbor Health Care |
| First Trust Exchange |
Harbor Health and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor Health and First Trust
The main advantage of trading using opposite Harbor Health and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Health position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Harbor Health vs. Horizon Kinetics Medical | Harbor Health vs. Ginkgo Bioworks Holdings | Harbor Health vs. Myriad Genetics |
| First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Expanded | First Trust vs. BlackRock Future Health | First Trust vs. SPDR SP Health |
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
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |