Correlation Between Vitec Software and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both Vitec Software and Hartford Financial 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 Vitec Software and Hartford Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vitec Software Group and Hartford Financial Services, you can compare the effects of market volatilities on Vitec Software and Hartford Financial 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 Vitec Software with a short position of Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitec Software and Hartford Financial.
Diversification Opportunities for Vitec Software and Hartford Financial
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vitec and Hartford is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vitec Software Group and Hartford Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Financial and Vitec Software 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 Vitec Software Group are associated (or correlated) with Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Financial has no effect on the direction of Vitec Software i.e., Vitec Software and Hartford Financial go up and down completely randomly.
Pair Corralation between Vitec Software and Hartford Financial
Assuming the 90 days trading horizon Vitec Software is expected to generate 2.58 times less return on investment than Hartford Financial. In addition to that, Vitec Software is 1.59 times more volatile than Hartford Financial Services. It trades about 0.02 of its total potential returns per unit of risk. Hartford Financial Services is currently generating about 0.08 per unit of volatility. If you would invest 8,808 in Hartford Financial Services on November 4, 2024 and sell it today you would earn a total of 2,284 from holding Hartford Financial Services or generate 25.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.05% |
| Values | Daily Returns |
Vitec Software Group vs. Hartford Financial Services
Performance |
| Timeline |
| Vitec Software Group |
| Hartford Financial |
Vitec Software and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vitec Software and Hartford Financial
The main advantage of trading using opposite Vitec Software and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitec Software position performs unexpectedly, Hartford Financial 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 Hartford Financial will offset losses from the drop in Hartford Financial's long position.| Vitec Software vs. Batm Advanced Communications | Vitec Software vs. Power Metal Resources | Vitec Software vs. United Internet AG | Vitec Software vs. Alien Metals |
| Hartford Financial vs. Allianz Technology Trust | Hartford Financial vs. Zegona Communications Plc | Hartford Financial vs. Aeorema Communications Plc | Hartford Financial vs. Scandinavian Tobacco Group |
Check out your portfolio center.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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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