Correlation Between Harbor Energy and SPDR Gold

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

By analyzing existing cross correlation between Harbor Energy Transition and SPDR Gold Shares, you can compare the effects of market volatilities on Harbor Energy and SPDR Gold 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 Energy with a short position of SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Energy and SPDR Gold.

Diversification Opportunities for Harbor Energy and SPDR Gold

0.39

Correlation Coefficient

Harbor Energy  SPDR Gold

Weak diversification

The 3 months correlation between Harbor and SPDR is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Energy Transition and SPDR Gold Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold Shares and Harbor Energy 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 Energy Transition are associated (or correlated) with SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold Shares has no effect on the direction of Harbor Energy i.e., Harbor Energy and SPDR Gold go up and down completely randomly.

Pair Corralation between Harbor Energy and SPDR Gold

Given the investment horizon of 90 days Harbor Energy Transition is expected to generate 0.98 times more return on investment than SPDR Gold. However, Harbor Energy Transition is 1.02 times less risky than SPDR Gold. It trades about 0.09 of its potential returns per unit of risk. SPDR Gold Shares is currently generating about 0.06 per unit of risk. If you would invest  1,255  in Harbor Energy Transition on September 14, 2024 and sell it today you would earn a total of  68.00  from holding Harbor Energy Transition or generate 5.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Harbor Energy Transition  vs.  SPDR Gold Shares

Harbor Energy Transition

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Energy Transition are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Harbor Energy is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

SPDR Gold Shares

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Gold Shares are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, SPDR Gold is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Harbor Energy and SPDR Gold

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

The idea behind Harbor Energy Transition and SPDR Gold Shares 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..