Correlation Between Harbor ETF and AltShares Trust

Can any of the company-specific risk be diversified away by investing in both Harbor ETF and AltShares Trust 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 AltShares Trust 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 AltShares Trust , you can compare the effects of market volatilities on Harbor ETF and AltShares Trust 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 AltShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor ETF and AltShares Trust.

Diversification Opportunities for Harbor ETF and AltShares Trust

0.7

Correlation Coefficient

Harbor ETF  AltShares Trust

Poor diversification

The 3 months correlation between Harbor and AltShares is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Harbor ETF Trust and AltShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltShares Trust 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 AltShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltShares Trust has no effect on the direction of Harbor ETF i.e., Harbor ETF and AltShares Trust go up and down completely randomly.

Pair Corralation between Harbor ETF and AltShares Trust

Given the investment horizon of 90 days Harbor ETF Trust is expected to generate 1.89 times more return on investment than AltShares Trust. However, Harbor ETF is 1.89 times more volatile than AltShares Trust . It trades about 0.11 of its potential returns per unit of risk. AltShares Trust is currently generating about 0.0 per unit of risk. If you would invest  2,350  in Harbor ETF Trust on August 29, 2024 and sell it today you would earn a total of  29.00  from holding Harbor ETF Trust or generate 1.23% return on investment over 90 days.

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

Harbor ETF Trust  vs.  AltShares Trust

Harbor ETF Trust

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor ETF Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Harbor ETF is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

AltShares Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AltShares Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, AltShares Trust is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Harbor ETF and AltShares Trust

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

The idea behind Harbor ETF Trust and AltShares Trust 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.