Correlation Between American Mutual and Hartford Inflation
Can any of the company-specific risk be diversified away by investing in both American Mutual and Hartford Inflation 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 Inflation 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 Inflation, you can compare the effects of market volatilities on American Mutual and Hartford Inflation 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 Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Hartford Inflation.
Diversification Opportunities for American Mutual and Hartford Inflation
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Hartford is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and The Hartford Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Inflation 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 Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Inflation has no effect on the direction of American Mutual i.e., American Mutual and Hartford Inflation go up and down completely randomly.
Pair Corralation between American Mutual and Hartford Inflation
Assuming the 90 days horizon American Mutual Fund is expected to generate 2.73 times more return on investment than Hartford Inflation. However, American Mutual is 2.73 times more volatile than The Hartford Inflation. It trades about 0.12 of its potential returns per unit of risk. The Hartford Inflation is currently generating about 0.1 per unit of risk. If you would invest 5,398 in American Mutual Fund on September 13, 2024 and sell it today you would earn a total of 504.00 from holding American Mutual Fund or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. The Hartford Inflation
Performance |
| Timeline |
| American Mutual |
| The Hartford Inflation |
American Mutual and Hartford Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Hartford Inflation
The main advantage of trading using opposite American Mutual and Hartford Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Hartford Inflation 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 Inflation will offset losses from the drop in Hartford Inflation's long position.| American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund | American Mutual vs. Washington Mutual Investors | American Mutual vs. Aquagold International |
| Hartford Inflation vs. Delaware Healthcare Fund | Hartford Inflation vs. Health Biotchnology Portfolio | Hartford Inflation vs. Baillie Gifford Health | Hartford Inflation vs. Fidelity Advisor Health |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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