Correlation Between Applied Finance and Hartford Moderate
Can any of the company-specific risk be diversified away by investing in both Applied Finance 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 Applied Finance and Hartford Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Hartford Moderate Allocation, you can compare the effects of market volatilities on Applied Finance 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 Applied Finance with a short position of Hartford Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Hartford Moderate.
Diversification Opportunities for Applied Finance and Hartford Moderate
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Applied and Hartford is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Hartford Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Moderate and Applied Finance 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 Applied Finance Explorer 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 Applied Finance i.e., Applied Finance and Hartford Moderate go up and down completely randomly.
Pair Corralation between Applied Finance and Hartford Moderate
Assuming the 90 days horizon Applied Finance Explorer is expected to generate 3.22 times more return on investment than Hartford Moderate. However, Applied Finance is 3.22 times more volatile than Hartford Moderate Allocation. It trades about 0.05 of its potential returns per unit of risk. Hartford Moderate Allocation is currently generating about 0.1 per unit of risk. If you would invest 1,865 in Applied Finance Explorer on September 12, 2024 and sell it today you would earn a total of 491.00 from holding Applied Finance Explorer or generate 26.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Finance Explorer vs. Hartford Moderate Allocation
Performance |
| Timeline |
| Applied Finance Explorer |
| Hartford Moderate |
Applied Finance and Hartford Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Finance and Hartford Moderate
The main advantage of trading using opposite Applied Finance and Hartford Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance 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.| Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
| Hartford Moderate vs. Applied Finance Explorer | Hartford Moderate vs. Valic Company I | Hartford Moderate vs. Royce Opportunity Fund | Hartford Moderate vs. Boston Partners Small |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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