Correlation Between IShares NASDAQ and Harvest Clean
Can any of the company-specific risk be diversified away by investing in both IShares NASDAQ and Harvest Clean 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 NASDAQ and Harvest Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares NASDAQ 100 and Harvest Clean Energy, you can compare the effects of market volatilities on IShares NASDAQ and Harvest Clean 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 NASDAQ with a short position of Harvest Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares NASDAQ and Harvest Clean.
Diversification Opportunities for IShares NASDAQ and Harvest Clean
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Harvest is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding iShares NASDAQ 100 and Harvest Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Clean Energy and IShares NASDAQ 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 NASDAQ 100 are associated (or correlated) with Harvest Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Clean Energy has no effect on the direction of IShares NASDAQ i.e., IShares NASDAQ and Harvest Clean go up and down completely randomly.
Pair Corralation between IShares NASDAQ and Harvest Clean
Assuming the 90 days trading horizon iShares NASDAQ 100 is expected to generate 0.63 times more return on investment than Harvest Clean. However, iShares NASDAQ 100 is 1.6 times less risky than Harvest Clean. It trades about 0.04 of its potential returns per unit of risk. Harvest Clean Energy is currently generating about -0.1 per unit of risk. If you would invest 5,176 in iShares NASDAQ 100 on August 30, 2024 and sell it today you would earn a total of 41.00 from holding iShares NASDAQ 100 or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares NASDAQ 100 vs. Harvest Clean Energy
Performance |
| Timeline |
| iShares NASDAQ 100 |
| Harvest Clean Energy |
IShares NASDAQ and Harvest Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares NASDAQ and Harvest Clean
The main advantage of trading using opposite IShares NASDAQ and Harvest Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares NASDAQ position performs unexpectedly, Harvest Clean 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 Clean will offset losses from the drop in Harvest Clean's long position.| IShares NASDAQ vs. BMO Low Volatility | IShares NASDAQ vs. BMO MSCI USA | IShares NASDAQ vs. BMO Equal Weight | IShares NASDAQ vs. BMO Dividend ETF |
| Harvest Clean vs. Harvest Premium Yield | Harvest Clean vs. Harvest Balanced Income | Harvest Clean vs. Harvest Energy Leaders | Harvest Clean vs. Harvest Eli Lilly |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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