Correlation Between IShares Commodity and Harbor All

Can any of the company-specific risk be diversified away by investing in both IShares Commodity and Harbor All 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 Commodity and Harbor All into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Commodity Curve and Harbor All Weather Inflation, you can compare the effects of market volatilities on IShares Commodity and Harbor All 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 Commodity with a short position of Harbor All. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Commodity and Harbor All.

Diversification Opportunities for IShares Commodity and Harbor All

0.94

Correlation Coefficient

IShares Commodity  Harbor All

Almost no diversification

The 3 months correlation between IShares and Harbor is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding iShares Commodity Curve and Harbor All Weather Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor All Weather and IShares Commodity 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 Commodity Curve are associated (or correlated) with Harbor All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor All Weather has no effect on the direction of IShares Commodity i.e., IShares Commodity and Harbor All go up and down completely randomly.

Pair Corralation between IShares Commodity and Harbor All

Given the investment horizon of 90 days IShares Commodity is expected to generate 1.66 times less return on investment than Harbor All. In addition to that, IShares Commodity is 1.2 times more volatile than Harbor All Weather Inflation. It trades about 0.03 of its total potential returns per unit of risk. Harbor All Weather Inflation is currently generating about 0.07 per unit of volatility. If you would invest  2,176  in Harbor All Weather Inflation on September 3, 2024 and sell it today you would earn a total of  79.00  from holding Harbor All Weather Inflation or generate 3.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

iShares Commodity Curve  vs.  Harbor All Weather Inflation

iShares Commodity Curve

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Commodity Curve are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, IShares Commodity is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Harbor All Weather

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor All Weather Inflation are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Harbor All is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with IShares Commodity and Harbor All

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

The idea behind iShares Commodity Curve and Harbor All Weather Inflation 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.