Correlation Between Arbitrage Credit and Hartford Growth
Can any of the company-specific risk be diversified away by investing in both Arbitrage Credit and Hartford Growth 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 Arbitrage Credit and Hartford Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Arbitrage Credit and The Hartford Growth, you can compare the effects of market volatilities on Arbitrage Credit and Hartford Growth 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 Arbitrage Credit with a short position of Hartford Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbitrage Credit and Hartford Growth.
Diversification Opportunities for Arbitrage Credit and Hartford Growth
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arbitrage and Hartford is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding The Arbitrage Credit and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Arbitrage Credit 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 The Arbitrage Credit are associated (or correlated) with Hartford Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Arbitrage Credit i.e., Arbitrage Credit and Hartford Growth go up and down completely randomly.
Pair Corralation between Arbitrage Credit and Hartford Growth
Assuming the 90 days horizon Arbitrage Credit is expected to generate 16.8 times less return on investment than Hartford Growth. But when comparing it to its historical volatility, The Arbitrage Credit is 12.36 times less risky than Hartford Growth. It trades about 0.16 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5,224 in The Hartford Growth on September 12, 2024 and sell it today you would earn a total of 758.00 from holding The Hartford Growth or generate 14.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Arbitrage Credit vs. The Hartford Growth
Performance |
| Timeline |
| Arbitrage Credit |
| Hartford Growth |
Arbitrage Credit and Hartford Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbitrage Credit and Hartford Growth
The main advantage of trading using opposite Arbitrage Credit and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbitrage Credit position performs unexpectedly, Hartford Growth 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 Growth will offset losses from the drop in Hartford Growth's long position.| Arbitrage Credit vs. Strategic Allocation Moderate | Arbitrage Credit vs. Qs Moderate Growth | Arbitrage Credit vs. Blackrock Moderate Prepared | Arbitrage Credit vs. Transamerica Cleartrack Retirement |
| Hartford Growth vs. American Funds The | Hartford Growth vs. American Funds The | Hartford Growth vs. Growth Fund Of | Hartford Growth vs. Growth Fund Of |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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