Correlation Between Harbor ETF and IShares MSCI

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

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

Diversification Opportunities for Harbor ETF and IShares MSCI

0.94

Correlation Coefficient

Harbor ETF  IShares MSCI

Almost no diversification

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

Pair Corralation between Harbor ETF and IShares MSCI

Given the investment horizon of 90 days Harbor ETF is expected to generate 1.29 times less return on investment than IShares MSCI. In addition to that, Harbor ETF is 1.11 times more volatile than iShares MSCI EAFE. It trades about 0.16 of its total potential returns per unit of risk. iShares MSCI EAFE is currently generating about 0.23 per unit of volatility. If you would invest  6,656  in iShares MSCI EAFE on May 7, 2025 and sell it today you would earn a total of  703.00  from holding iShares MSCI EAFE or generate 10.56% return on investment over 90 days.

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

Harbor ETF Trust  vs.  iShares MSCI EAFE

Harbor ETF Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor ETF Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Harbor ETF may actually be approaching a critical reversion point that can send shares even higher in September 2025.

iShares MSCI EAFE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI EAFE are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, IShares MSCI may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Harbor ETF and IShares MSCI

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

The idea behind Harbor ETF Trust and iShares MSCI EAFE 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.