Correlation Between IShares SPTSX and Harvest Bank
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and Harvest Bank 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 IShares SPTSX and Harvest Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SPTSX Capped and Harvest Bank Leaders, you can compare the effects of market volatilities on IShares SPTSX and Harvest Bank 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 IShares SPTSX with a short position of Harvest Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Harvest Bank.
Diversification Opportunities for IShares SPTSX and Harvest Bank
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Harvest is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Capped and Harvest Bank Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Bank Leaders and IShares SPTSX 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 iShares SPTSX Capped are associated (or correlated) with Harvest Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Bank Leaders has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and Harvest Bank go up and down completely randomly.
Pair Corralation between IShares SPTSX and Harvest Bank
Assuming the 90 days trading horizon IShares SPTSX is expected to generate 2.27 times less return on investment than Harvest Bank. But when comparing it to its historical volatility, iShares SPTSX Capped is 3.38 times less risky than Harvest Bank. It trades about 0.33 of its potential returns per unit of risk. Harvest Bank Leaders is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,255 in Harvest Bank Leaders on August 28, 2024 and sell it today you would earn a total of 222.00 from holding Harvest Bank Leaders or generate 17.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SPTSX Capped vs. Harvest Bank Leaders
Performance |
| Timeline |
| iShares SPTSX Capped |
| Harvest Bank Leaders |
IShares SPTSX and Harvest Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and Harvest Bank
The main advantage of trading using opposite IShares SPTSX and Harvest Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX position performs unexpectedly, Harvest Bank 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 Harvest Bank will offset losses from the drop in Harvest Bank's long position.| IShares SPTSX vs. Brompton Global Dividend | IShares SPTSX vs. Tech Leaders Income | IShares SPTSX vs. Global Healthcare Income | IShares SPTSX vs. Brompton European Dividend |
| Harvest Bank vs. Harvest Brand Leaders | Harvest Bank vs. Harvest Tech Achievers | Harvest Bank vs. Harvest Equal Weight | Harvest Bank vs. Energy Leaders Plus |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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