Correlation Between Harbor Long and MicroSectors FANG

Can any of the company-specific risk be diversified away by investing in both Harbor Long and MicroSectors FANG 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 MicroSectors FANG 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 MicroSectors FANG Index, you can compare the effects of market volatilities on Harbor Long and MicroSectors FANG 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 MicroSectors FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Long and MicroSectors FANG.

Diversification Opportunities for Harbor Long and MicroSectors FANG

-0.75

Correlation Coefficient

Harbor Long  MicroSectors FANG

Pay attention - limited upside

The 3 months correlation between Harbor and MicroSectors is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Long Term Growers and MicroSectors FANG Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG Index 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 MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG Index has no effect on the direction of Harbor Long i.e., Harbor Long and MicroSectors FANG go up and down completely randomly.

Pair Corralation between Harbor Long and MicroSectors FANG

Given the investment horizon of 90 days Harbor Long Term Growers is expected to generate 0.26 times more return on investment than MicroSectors FANG. However, Harbor Long Term Growers is 3.91 times less risky than MicroSectors FANG. It trades about 0.0 of its potential returns per unit of risk. MicroSectors FANG Index is currently generating about -0.03 per unit of risk. If you would invest  2,300  in Harbor Long Term Growers on February 4, 2024 and sell it today you would lose (6.00) from holding Harbor Long Term Growers or give up 0.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Harbor Long Term Growers  vs.  MicroSectors FANG Index

Harbor Long Term

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Long Term Growers are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Harbor Long is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

MicroSectors FANG Index

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MicroSectors FANG Index has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Etf's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Harbor Long and MicroSectors FANG

The main advantage of trading using opposite Harbor Long and MicroSectors FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Long position performs unexpectedly, MicroSectors FANG 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 MicroSectors FANG will offset losses from the drop in MicroSectors FANG's long position.

The idea behind Harbor Long Term Growers and MicroSectors FANG Index 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.