Correlation Between Amcap Fund and Hartford Small
Can any of the company-specific risk be diversified away by investing in both Amcap Fund and Hartford Small 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 Amcap Fund and Hartford Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amcap Fund Class and The Hartford Small, you can compare the effects of market volatilities on Amcap Fund and Hartford Small 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 Amcap Fund with a short position of Hartford Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcap Fund and Hartford Small.
Diversification Opportunities for Amcap Fund and Hartford Small
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amcap and Hartford is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Amcap Fund Class and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small and Amcap Fund 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 Amcap Fund Class are associated (or correlated) with Hartford Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small has no effect on the direction of Amcap Fund i.e., Amcap Fund and Hartford Small go up and down completely randomly.
Pair Corralation between Amcap Fund and Hartford Small
Assuming the 90 days horizon Amcap Fund is expected to generate 1.2 times less return on investment than Hartford Small. But when comparing it to its historical volatility, Amcap Fund Class is 1.47 times less risky than Hartford Small. It trades about 0.18 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,803 in The Hartford Small on September 12, 2024 and sell it today you would earn a total of 290.00 from holding The Hartford Small or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Amcap Fund Class vs. The Hartford Small
Performance |
| Timeline |
| Amcap Fund Class |
| Hartford Small |
Amcap Fund and Hartford Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amcap Fund and Hartford Small
The main advantage of trading using opposite Amcap Fund and Hartford Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcap Fund position performs unexpectedly, Hartford Small 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 Small will offset losses from the drop in Hartford Small's long position.| Amcap Fund vs. Mid Cap 15x Strategy | Amcap Fund vs. Nasdaq 100 2x Strategy | Amcap Fund vs. Artisan Emerging Markets | Amcap Fund vs. Franklin Emerging Market |
| Hartford Small vs. T Rowe Price | Hartford Small vs. Ab Value Fund | Hartford Small vs. Nasdaq 100 Index Fund | Hartford Small vs. T Rowe Price |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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