Correlation Between Westwood Smallcap and Harbor Diversified
Can any of the company-specific risk be diversified away by investing in both Westwood Smallcap and Harbor Diversified 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 Westwood Smallcap and Harbor Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Smallcap Growth and Harbor Diversified International, you can compare the effects of market volatilities on Westwood Smallcap and Harbor Diversified 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 Westwood Smallcap with a short position of Harbor Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Smallcap and Harbor Diversified.
Diversification Opportunities for Westwood Smallcap and Harbor Diversified
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westwood and HARBOR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Smallcap Growth and Harbor Diversified Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Diversified and Westwood Smallcap 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 Westwood Smallcap Growth are associated (or correlated) with Harbor Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Diversified has no effect on the direction of Westwood Smallcap i.e., Westwood Smallcap and Harbor Diversified go up and down completely randomly.
Pair Corralation between Westwood Smallcap and Harbor Diversified
Assuming the 90 days horizon Westwood Smallcap is expected to generate 1.23 times less return on investment than Harbor Diversified. In addition to that, Westwood Smallcap is 1.6 times more volatile than Harbor Diversified International. It trades about 0.03 of its total potential returns per unit of risk. Harbor Diversified International is currently generating about 0.05 per unit of volatility. If you would invest 1,054 in Harbor Diversified International on September 2, 2024 and sell it today you would earn a total of 223.00 from holding Harbor Diversified International or generate 21.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 15.73% |
| Values | Daily Returns |
Westwood Smallcap Growth vs. Harbor Diversified Internation
Performance |
| Timeline |
| Westwood Smallcap Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Harbor Diversified |
Westwood Smallcap and Harbor Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Smallcap and Harbor Diversified
The main advantage of trading using opposite Westwood Smallcap and Harbor Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Smallcap position performs unexpectedly, Harbor Diversified 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 Diversified will offset losses from the drop in Harbor Diversified's long position.| Westwood Smallcap vs. Pender Real Estate | Westwood Smallcap vs. Franklin Real Estate | Westwood Smallcap vs. Fidelity Real Estate | Westwood Smallcap vs. Tiaa Cref Real Estate |
| Harbor Diversified vs. Artisan Small Cap | Harbor Diversified vs. Small Midcap Dividend Income | Harbor Diversified vs. T Rowe Price | Harbor Diversified vs. Legg Mason Partners |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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