Correlation Between Avantis Large and Hartford Growth
Can any of the company-specific risk be diversified away by investing in both Avantis Large 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 Avantis Large and Hartford Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis Large Cap and The Hartford Growth, you can compare the effects of market volatilities on Avantis Large 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 Avantis Large with a short position of Hartford Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Large and Hartford Growth.
Diversification Opportunities for Avantis Large and Hartford Growth
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Avantis and Hartford is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Large Cap and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Avantis Large 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 Avantis Large Cap 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 Avantis Large i.e., Avantis Large and Hartford Growth go up and down completely randomly.
Pair Corralation between Avantis Large and Hartford Growth
Assuming the 90 days horizon Avantis Large is expected to generate 2.03 times less return on investment than Hartford Growth. But when comparing it to its historical volatility, Avantis Large Cap is 1.58 times less risky than Hartford Growth. It trades about 0.1 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,301 in The Hartford Growth on September 14, 2024 and sell it today you would earn a total of 2,401 from holding The Hartford Growth or generate 45.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis Large Cap vs. The Hartford Growth
Performance |
| Timeline |
| Avantis Large Cap |
| Hartford Growth |
Avantis Large and Hartford Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Large and Hartford Growth
The main advantage of trading using opposite Avantis Large and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Large 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.| Avantis Large vs. Ab Global Real | Avantis Large vs. Ab Global Bond | Avantis Large vs. Barings Global Floating | Avantis Large vs. Franklin Mutual Global |
| Hartford Growth vs. Commonwealth Global Fund | Hartford Growth vs. Jhancock Global Equity | Hartford Growth vs. Artisan Global Unconstrained | Hartford Growth vs. Morningstar Global Income |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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