Correlation Between Pace International and Harbor Bond
Can any of the company-specific risk be diversified away by investing in both Pace International and Harbor Bond 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 Pace International and Harbor Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Emerging and Harbor Bond Fund, you can compare the effects of market volatilities on Pace International and Harbor Bond 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 Pace International with a short position of Harbor Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and Harbor Bond.
Diversification Opportunities for Pace International and Harbor Bond
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pace and Harbor is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging and Harbor Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Bond Fund and Pace 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 Pace International Emerging are associated (or correlated) with Harbor Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Bond Fund has no effect on the direction of Pace International i.e., Pace International and Harbor Bond go up and down completely randomly.
Pair Corralation between Pace International and Harbor Bond
Assuming the 90 days horizon Pace International Emerging is expected to generate 2.19 times more return on investment than Harbor Bond. However, Pace International is 2.19 times more volatile than Harbor Bond Fund. It trades about 0.04 of its potential returns per unit of risk. Harbor Bond Fund is currently generating about 0.05 per unit of risk. If you would invest 1,152 in Pace International Emerging on September 12, 2024 and sell it today you would earn a total of 210.00 from holding Pace International Emerging or generate 18.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace International Emerging vs. Harbor Bond Fund
Performance |
| Timeline |
| Pace International |
| Harbor Bond Fund |
Pace International and Harbor Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace International and Harbor Bond
The main advantage of trading using opposite Pace International and Harbor Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International position performs unexpectedly, Harbor Bond 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 Bond will offset losses from the drop in Harbor Bond's long position.| Pace International vs. Prudential Jennison Financial | Pace International vs. Davis Financial Fund | Pace International vs. Financials Ultrasector Profund | Pace International vs. Mesirow Financial Small |
| Harbor Bond vs. Pace International Emerging | Harbor Bond vs. Ep Emerging Markets | Harbor Bond vs. Investec Emerging Markets | Harbor Bond vs. Black Oak Emerging |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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