Correlation Between American Mutual and Hartford Growth
Can any of the company-specific risk be diversified away by investing in both American Mutual 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 American Mutual and Hartford Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and The Hartford Growth, you can compare the effects of market volatilities on American Mutual 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 American Mutual with a short position of Hartford Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Hartford Growth.
Diversification Opportunities for American Mutual and Hartford Growth
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Hartford is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and American Mutual 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 Mutual Fund 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 American Mutual i.e., American Mutual and Hartford Growth go up and down completely randomly.
Pair Corralation between American Mutual and Hartford Growth
Assuming the 90 days horizon American Mutual is expected to generate 2.31 times less return on investment than Hartford Growth. But when comparing it to its historical volatility, American Mutual Fund is 2.24 times less risky than Hartford Growth. It trades about 0.12 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. The Hartford Growth
Performance |
| Timeline |
| American Mutual |
| Hartford Growth |
American Mutual and Hartford Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Hartford Growth
The main advantage of trading using opposite American Mutual and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual 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.| American Mutual vs. Amcap Fund Class | American Mutual vs. American Balanced Fund | American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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