Correlation Between Harbor International and Omni Small

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

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

Diversification Opportunities for Harbor International and Omni Small

0.92

Correlation Coefficient

Harbor International  Omni Small

Almost no diversification

The 3 months correlation between Harbor and Omni is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Harbor International Small and Omni Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Small Cap and Harbor International 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 International Small are associated (or correlated) with Omni Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Small Cap has no effect on the direction of Harbor International i.e., Harbor International and Omni Small go up and down completely randomly.

Pair Corralation between Harbor International and Omni Small

Assuming the 90 days horizon Harbor International Small is expected to generate 0.55 times more return on investment than Omni Small. However, Harbor International Small is 1.82 times less risky than Omni Small. It trades about 0.2 of its potential returns per unit of risk. Omni Small Cap Value is currently generating about 0.09 per unit of risk. If you would invest  1,492  in Harbor International Small on May 6, 2025 and sell it today you would earn a total of  138.00  from holding Harbor International Small or generate 9.25% return on investment over 90 days.

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

Harbor International Small  vs.  Omni Small Cap Value

Harbor International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor International Small are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Harbor International may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Omni Small Cap

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Omni Small Cap Value are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Omni Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Harbor International and Omni Small

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

The idea behind Harbor International Small and Omni Small Cap Value 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.