Correlation Between Harbor Health and MicroSectors Gold

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

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

Diversification Opportunities for Harbor Health and MicroSectors Gold

-0.39

Correlation Coefficient

Harbor Health  MicroSectors Gold

Very good diversification

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

Pair Corralation between Harbor Health and MicroSectors Gold

Given the investment horizon of 90 days Harbor Health Care is expected to under-perform the MicroSectors Gold. But the etf apears to be less risky and, when comparing its historical volatility, Harbor Health Care is 3.98 times less risky than MicroSectors Gold. The etf trades about -0.01 of its potential returns per unit of risk. The MicroSectors Gold Miners is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  3,577  in MicroSectors Gold Miners on January 28, 2025 and sell it today you would earn a total of  2,989  from holding MicroSectors Gold Miners or generate 83.56% return on investment over 90 days.

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

Harbor Health Care  vs.  MicroSectors Gold Miners

Harbor Health Care

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harbor Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Harbor Health is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

MicroSectors Gold Miners

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MicroSectors Gold Miners are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, MicroSectors Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harbor Health and MicroSectors Gold

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

The idea behind Harbor Health Care and MicroSectors Gold Miners 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.