Correlation Between Harbor Long and First Trust
Can any of the company-specific risk be diversified away by investing in both Harbor Long and First Trust 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 Harbor Long and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harbor Long Term Growers and First Trust Europe, you can compare the effects of market volatilities on Harbor Long and First Trust 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 Harbor Long with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Long and First Trust.
Diversification Opportunities for Harbor Long and First Trust
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harbor and First is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Long Term Growers and First Trust Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Europe and Harbor Long 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 Harbor Long Term Growers are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Europe has no effect on the direction of Harbor Long i.e., Harbor Long and First Trust go up and down completely randomly.
Pair Corralation between Harbor Long and First Trust
Given the investment horizon of 90 days Harbor Long is expected to generate 3.09 times less return on investment than First Trust. In addition to that, Harbor Long is 1.56 times more volatile than First Trust Europe. It trades about 0.04 of its total potential returns per unit of risk. First Trust Europe is currently generating about 0.21 per unit of volatility. If you would invest 3,546 in First Trust Europe on October 20, 2024 and sell it today you would earn a total of 114.00 from holding First Trust Europe or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbor Long Term Growers vs. First Trust Europe
Performance |
| Timeline |
| Harbor Long Term |
| First Trust Europe |
Harbor Long and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor Long and First Trust
The main advantage of trading using opposite Harbor Long and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Long position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Harbor Long vs. Weis Markets | Harbor Long vs. Village Super Market | Harbor Long vs. Ingles Markets Incorporated | Harbor Long vs. SpartanNash Co |
| First Trust vs. First Trust Emerging | First Trust vs. First Trust Developed | First Trust vs. First Trust Large | First Trust vs. First Trust Japan |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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