Correlation Between Mid Cap and The Hartford
Can any of the company-specific risk be diversified away by investing in both Mid Cap and The Hartford 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 Mid Cap and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap Value and The Hartford Midcap, you can compare the effects of market volatilities on Mid Cap and The Hartford 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 Mid Cap with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and The Hartford.
Diversification Opportunities for Mid Cap and The Hartford
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mid and The is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Value and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap and Mid Cap 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 Mid Cap Value are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Midcap has no effect on the direction of Mid Cap i.e., Mid Cap and The Hartford go up and down completely randomly.
Pair Corralation between Mid Cap and The Hartford
Assuming the 90 days horizon Mid Cap is expected to generate 1.96 times less return on investment than The Hartford. But when comparing it to its historical volatility, Mid Cap Value is 1.35 times less risky than The Hartford. It trades about 0.26 of its potential returns per unit of risk. The Hartford Midcap is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,837 in The Hartford Midcap on August 27, 2024 and sell it today you would earn a total of 249.00 from holding The Hartford Midcap or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap Value vs. The Hartford Midcap
Performance |
| Timeline |
| Mid Cap Value |
| Hartford Midcap |
Mid Cap and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Cap and The Hartford
The main advantage of trading using opposite Mid Cap and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Mid Cap vs. Janus Triton Fund | Mid Cap vs. New World Fund | Mid Cap vs. Fidelity Mid Cap | Mid Cap vs. Mfs Value Fund |
| The Hartford vs. T Rowe Price | The Hartford vs. Amcap Fund Class | The Hartford vs. Ab Small Cap | The Hartford vs. Wells Fargo Special |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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