Correlation Between American Beacon and Hartford Moderate
Can any of the company-specific risk be diversified away by investing in both American Beacon and Hartford Moderate 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 American Beacon and Hartford Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Small and Hartford Moderate Allocation, you can compare the effects of market volatilities on American Beacon and Hartford Moderate 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 American Beacon with a short position of Hartford Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Hartford Moderate.
Diversification Opportunities for American Beacon and Hartford Moderate
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and HARTFORD is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Small and Hartford Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Moderate and American Beacon 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 American Beacon Small are associated (or correlated) with Hartford Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Moderate has no effect on the direction of American Beacon i.e., American Beacon and Hartford Moderate go up and down completely randomly.
Pair Corralation between American Beacon and Hartford Moderate
Assuming the 90 days horizon American Beacon Small is expected to under-perform the Hartford Moderate. In addition to that, American Beacon is 2.93 times more volatile than Hartford Moderate Allocation. It trades about -0.03 of its total potential returns per unit of risk. Hartford Moderate Allocation is currently generating about 0.12 per unit of volatility. If you would invest 1,270 in Hartford Moderate Allocation on November 1, 2024 and sell it today you would earn a total of 45.00 from holding Hartford Moderate Allocation or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Small vs. Hartford Moderate Allocation
Performance |
| Timeline |
| American Beacon Small |
| Hartford Moderate |
American Beacon and Hartford Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Hartford Moderate
The main advantage of trading using opposite American Beacon and Hartford Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Hartford Moderate 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 Moderate will offset losses from the drop in Hartford Moderate's long position.| American Beacon vs. Hartford Moderate Allocation | American Beacon vs. Dimensional Retirement Income | American Beacon vs. Blackrock Moderate Prepared | American Beacon vs. Great West Moderately Aggressive |
| Hartford Moderate vs. Goldman Sachs Government | Hartford Moderate vs. Franklin Adjustable Government | Hartford Moderate vs. Us Government Securities | Hartford Moderate vs. Payden Government Fund |
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 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.
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