Correlation Between SPDR SP and Harbor ETF
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SPDR SP and Harbor ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and Harbor ETF Trust, you can compare the effects of market volatilities on SPDR SP 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 SPDR SP with a short position of Harbor ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Harbor ETF.
Diversification Opportunities for SPDR SP and Harbor ETF
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Harbor is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 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 SPDR SP 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 SPDR SP 500 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 SPDR SP i.e., SPDR SP and Harbor ETF go up and down completely randomly.
Pair Corralation between SPDR SP and Harbor ETF
Considering the 90-day investment horizon SPDR SP is expected to generate 1.52 times less return on investment than Harbor ETF. But when comparing it to its historical volatility, SPDR SP 500 is 2.42 times less risky than Harbor ETF. It trades about 0.38 of its potential returns per unit of risk. Harbor ETF Trust is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 3,270 in Harbor ETF Trust on September 5, 2024 and sell it today you would earn a total of 294.00 from holding Harbor ETF Trust or generate 8.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. Harbor ETF Trust
Performance |
| Timeline |
| SPDR SP 500 |
| Harbor ETF Trust |
SPDR SP and Harbor ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Harbor ETF
The main advantage of trading using opposite SPDR SP and Harbor ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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.| SPDR SP vs. SPDR Gold Shares | SPDR SP vs. Vanguard Real Estate | SPDR SP vs. Vanguard Total Stock | SPDR SP vs. Vanguard FTSE Emerging |
| Harbor ETF vs. FT Vest Equity | Harbor ETF vs. Northern Lights | Harbor ETF vs. Dimensional International High | Harbor ETF vs. JPMorgan Fundamental Data |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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