Correlation Between The Arbitrage and The Hartford
Can any of the company-specific risk be diversified away by investing in both The Arbitrage 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 The Arbitrage and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Arbitrage Fund and The Hartford Growth, you can compare the effects of market volatilities on The Arbitrage 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 The Arbitrage with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Arbitrage and The Hartford.
Diversification Opportunities for The Arbitrage and The Hartford
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and The is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding The Arbitrage 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 The Arbitrage 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 The Arbitrage Fund 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 Growth has no effect on the direction of The Arbitrage i.e., The Arbitrage and The Hartford go up and down completely randomly.
Pair Corralation between The Arbitrage and The Hartford
Assuming the 90 days horizon The Arbitrage is expected to generate 16.4 times less return on investment than The Hartford. But when comparing it to its historical volatility, The Arbitrage Fund is 4.39 times less risky than The Hartford. It trades about 0.03 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,192 in The Hartford Growth on September 4, 2024 and sell it today you would earn a total of 2,698 from holding The Hartford Growth or generate 84.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Arbitrage Fund vs. The Hartford Growth
Performance |
| Timeline |
| The Arbitrage |
| Hartford Growth |
The Arbitrage and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Arbitrage and The Hartford
The main advantage of trading using opposite The Arbitrage and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Arbitrage 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.| The Arbitrage vs. Ftfa Franklin Templeton Growth | The Arbitrage vs. Chase Growth Fund | The Arbitrage vs. Qs Moderate Growth | The Arbitrage vs. L Abbett Growth |
| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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