Correlation Between Harvest Healthcare and IShares Global

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

By analyzing existing cross correlation between Harvest Healthcare Leaders and iShares Global Water, you can compare the effects of market volatilities on Harvest Healthcare and IShares Global 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 Harvest Healthcare with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Healthcare and IShares Global.

Diversification Opportunities for Harvest Healthcare and IShares Global

-0.4

Correlation Coefficient

Harvest Healthcare  IShares Global

Very good diversification

The 3 months correlation between Harvest and IShares is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Healthcare Leaders and iShares Global Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Water and Harvest Healthcare 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 Harvest Healthcare Leaders are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Water has no effect on the direction of Harvest Healthcare i.e., Harvest Healthcare and IShares Global go up and down completely randomly.

Pair Corralation between Harvest Healthcare and IShares Global

Assuming the 90 days trading horizon Harvest Healthcare Leaders is expected to under-perform the IShares Global. But the etf apears to be less risky and, when comparing its historical volatility, Harvest Healthcare Leaders is 1.13 times less risky than IShares Global. The etf trades about -0.15 of its potential returns per unit of risk. The iShares Global Water is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  5,772  in iShares Global Water on September 2, 2024 and sell it today you would earn a total of  270.00  from holding iShares Global Water or generate 4.68% return on investment over 90 days.

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

Harvest Healthcare Leaders  vs.  iShares Global Water

Harvest Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harvest Healthcare Leaders has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Harvest Healthcare is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

iShares Global Water

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global Water are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Harvest Healthcare and IShares Global

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

The idea behind Harvest Healthcare Leaders and iShares Global Water 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.