Correlation Between Perkins Mid and Harbor International

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

By analyzing existing cross correlation between Perkins Mid Cap and Harbor International Growth, you can compare the effects of market volatilities on Perkins Mid and Harbor International 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 Perkins Mid with a short position of Harbor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perkins Mid and Harbor International.

Diversification Opportunities for Perkins Mid and Harbor International

-0.01

Correlation Coefficient

Perkins Mid  Harbor International

Good diversification

The 3 months correlation between Perkins and Harbor is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Perkins Mid Cap and Harbor International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor International and Perkins Mid 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 Perkins Mid Cap are associated (or correlated) with Harbor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor International has no effect on the direction of Perkins Mid i.e., Perkins Mid and Harbor International go up and down completely randomly.

Pair Corralation between Perkins Mid and Harbor International

Assuming the 90 days horizon Perkins Mid Cap is expected to under-perform the Harbor International. In addition to that, Perkins Mid is 2.21 times more volatile than Harbor International Growth. It trades about -0.1 of its total potential returns per unit of risk. Harbor International Growth is currently generating about 0.06 per unit of volatility. If you would invest  1,739  in Harbor International Growth on September 25, 2024 and sell it today you would earn a total of  20.00  from holding Harbor International Growth or generate 1.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	45.31%
Values	Daily Returns

Perkins Mid Cap  vs.  Harbor International Growth

Perkins Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perkins Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Harbor International

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Harbor International Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Harbor International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Perkins Mid and Harbor International

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

The idea behind Perkins Mid Cap and Harbor International Growth 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 Transaction History module to view history of all your transactions and understand their impact on performance.