Correlation Between Harbor Capital and Embark Commodity

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

By analyzing existing cross correlation between Harbor Capital Appreciation and Embark Commodity Strategy, you can compare the effects of market volatilities on Harbor Capital and Embark Commodity 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 Capital with a short position of Embark Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Capital and Embark Commodity.

Diversification Opportunities for Harbor Capital and Embark Commodity

0.64

Correlation Coefficient

Harbor Capital  Embark Commodity

Poor diversification

The 3 months correlation between Harbor and Embark is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Capital Appreciation and Embark Commodity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Commodity Strategy and Harbor Capital 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 Capital Appreciation are associated (or correlated) with Embark Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Commodity Strategy has no effect on the direction of Harbor Capital i.e., Harbor Capital and Embark Commodity go up and down completely randomly.

Pair Corralation between Harbor Capital and Embark Commodity

Assuming the 90 days horizon Harbor Capital Appreciation is expected to generate 1.17 times more return on investment than Embark Commodity. However, Harbor Capital is 1.17 times more volatile than Embark Commodity Strategy. It trades about 0.27 of its potential returns per unit of risk. Embark Commodity Strategy is currently generating about 0.06 per unit of risk. If you would invest  10,302  in Harbor Capital Appreciation on May 2, 2025 and sell it today you would earn a total of  1,550  from holding Harbor Capital Appreciation or generate 15.05% return on investment over 90 days.

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

Harbor Capital Appreciation  vs.  Embark Commodity Strategy

Harbor Capital Appre

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Capital Appreciation are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Harbor Capital showed solid returns over the last few months and may actually be approaching a breakup point.

Embark Commodity Strategy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Embark Commodity Strategy are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Embark Commodity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Harbor Capital and Embark Commodity

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

The idea behind Harbor Capital Appreciation and Embark Commodity Strategy 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.