Correlation Between Nationwide Highmark and Harbor Small
Can any of the company-specific risk be diversified away by investing in both Nationwide Highmark and Harbor Small 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 Nationwide Highmark and Harbor Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Highmark Small and Harbor Small Cap, you can compare the effects of market volatilities on Nationwide Highmark and Harbor Small 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 Nationwide Highmark with a short position of Harbor Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Highmark and Harbor Small.
Diversification Opportunities for Nationwide Highmark and Harbor Small
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nationwide and Harbor is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Highmark Small and Harbor Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Small Cap and Nationwide Highmark 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 Nationwide Highmark Small are associated (or correlated) with Harbor Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Small Cap has no effect on the direction of Nationwide Highmark i.e., Nationwide Highmark and Harbor Small go up and down completely randomly.
Pair Corralation between Nationwide Highmark and Harbor Small
Assuming the 90 days horizon Nationwide Highmark Small is expected to generate 1.07 times more return on investment than Harbor Small. However, Nationwide Highmark is 1.07 times more volatile than Harbor Small Cap. It trades about 0.02 of its potential returns per unit of risk. Harbor Small Cap is currently generating about -0.02 per unit of risk. If you would invest 3,536 in Nationwide Highmark Small on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Nationwide Highmark Small or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Highmark Small vs. Harbor Small Cap
Performance |
| Timeline |
| Nationwide Highmark Small |
| Harbor Small Cap |
Nationwide Highmark and Harbor Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Highmark and Harbor Small
The main advantage of trading using opposite Nationwide Highmark and Harbor Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Highmark position performs unexpectedly, Harbor Small 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 Small will offset losses from the drop in Harbor Small's long position.The idea behind Nationwide Highmark Small and Harbor Small Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Harbor Small vs. Harbor Vertible Securities | Harbor Small vs. Harbor Diversified International | Harbor Small vs. Harbor International Fund | Harbor Small vs. Harbor International 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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