Correlation Between Vanguard Explorer and Harbor Capital

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Vanguard Explorer and Harbor Capital 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 Vanguard Explorer and Harbor Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Explorer Fund and Harbor Capital Appreciation, you can compare the effects of market volatilities on Vanguard Explorer and Harbor Capital 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 Vanguard Explorer with a short position of Harbor Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Explorer and Harbor Capital.

Diversification Opportunities for Vanguard Explorer and Harbor Capital

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Vanguard and Harbor is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Explorer Fund and Harbor Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Capital Appre and Vanguard Explorer 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 Vanguard Explorer Fund are associated (or correlated) with Harbor Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Capital Appre has no effect on the direction of Vanguard Explorer i.e., Vanguard Explorer and Harbor Capital go up and down completely randomly.

Pair Corralation between Vanguard Explorer and Harbor Capital

Assuming the 90 days horizon Vanguard Explorer is expected to generate 1.28 times less return on investment than Harbor Capital. But when comparing it to its historical volatility, Vanguard Explorer Fund is 1.14 times less risky than Harbor Capital. It trades about 0.1 of its potential returns per unit of risk. Harbor Capital Appreciation is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  8,955  in Harbor Capital Appreciation on September 4, 2024 and sell it today you would earn a total of  3,159  from holding Harbor Capital Appreciation or generate 35.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Vanguard Explorer Fund  vs.  Harbor Capital Appreciation

 Performance 
       Timeline  
Vanguard Explorer 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Explorer Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Explorer may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Harbor Capital Appre 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Capital Appreciation are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Harbor Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vanguard Explorer and Harbor Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vanguard Explorer and Harbor Capital

The main advantage of trading using opposite Vanguard Explorer and Harbor Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Explorer position performs unexpectedly, Harbor Capital 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 Capital will offset losses from the drop in Harbor Capital's long position.
The idea behind Vanguard Explorer Fund and Harbor Capital Appreciation 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.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

Other Complementary Tools

Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas