Correlation Between Pear Tree and Harbor International
Can any of the company-specific risk be diversified away by investing in both Pear Tree and Harbor International 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 Pear Tree and Harbor International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pear Tree Polaris and Harbor International Small, you can compare the effects of market volatilities on Pear Tree and Harbor International 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 Pear Tree with a short position of Harbor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pear Tree and Harbor International.
Diversification Opportunities for Pear Tree and Harbor International
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pear and Harbor is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Pear Tree Polaris and Harbor International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor International and Pear Tree 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 Pear Tree Polaris are associated (or correlated) with Harbor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor International has no effect on the direction of Pear Tree i.e., Pear Tree and Harbor International go up and down completely randomly.
Pair Corralation between Pear Tree and Harbor International
Assuming the 90 days horizon Pear Tree Polaris is expected to under-perform the Harbor International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pear Tree Polaris is 1.03 times less risky than Harbor International. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Harbor International Small is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,475 in Harbor International Small on September 3, 2024 and sell it today you would lose (38.00) from holding Harbor International Small or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pear Tree Polaris vs. Harbor International Small
Performance |
| Timeline |
| Pear Tree Polaris |
| Harbor International |
Pear Tree and Harbor International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pear Tree and Harbor International
The main advantage of trading using opposite Pear Tree and Harbor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pear Tree position performs unexpectedly, Harbor International 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 International will offset losses from the drop in Harbor International's long position.| Pear Tree vs. Pear Tree Polaris | Pear Tree vs. Pear Tree Polaris | Pear Tree vs. Artisan International Value | Pear Tree vs. Johcm International Select |
| Harbor International vs. Nationwide Global Equity | Harbor International vs. Touchstone Large Cap | Harbor International vs. Principal Lifetime Hybrid | Harbor International vs. Artisan Thematic Fund |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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