Correlation Between Harvest Equal and Evolve Global

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

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

Diversification Opportunities for Harvest Equal and Evolve Global

-0.68

Correlation Coefficient

Harvest Equal  Evolve Global

Excellent diversification

The 3 months correlation between Harvest and Evolve is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Equal Weight and Evolve Global Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Global Healthcare and Harvest Equal 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 Equal Weight are associated (or correlated) with Evolve Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Global Healthcare has no effect on the direction of Harvest Equal i.e., Harvest Equal and Evolve Global go up and down completely randomly.

Pair Corralation between Harvest Equal and Evolve Global

Assuming the 90 days trading horizon Harvest Equal Weight is expected to generate 1.11 times more return on investment than Evolve Global. However, Harvest Equal is 1.11 times more volatile than Evolve Global Healthcare. It trades about 0.05 of its potential returns per unit of risk. Evolve Global Healthcare is currently generating about -0.29 per unit of risk. If you would invest  1,737  in Harvest Equal Weight on September 12, 2024 and sell it today you would earn a total of  37.00  from holding Harvest Equal Weight or generate 2.13% return on investment over 90 days.

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

Harvest Equal Weight  vs.  Evolve Global Healthcare

Harvest Equal Weight

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Equal Weight are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Harvest Equal is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Evolve Global Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolve Global Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Etf's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Harvest Equal and Evolve Global

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

The idea behind Harvest Equal Weight and Evolve Global Healthcare 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.