Correlation Between ARK Next and Hartford Multifactor
Can any of the company-specific risk be diversified away by investing in both ARK Next and Hartford Multifactor 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 ARK Next and Hartford Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARK Next Generation and Hartford Multifactor Emerging, you can compare the effects of market volatilities on ARK Next and Hartford Multifactor 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 ARK Next with a short position of Hartford Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARK Next and Hartford Multifactor.
Diversification Opportunities for ARK Next and Hartford Multifactor
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ARK and Hartford is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ARK Next Generation and Hartford Multifactor Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Multifactor and ARK Next 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 ARK Next Generation are associated (or correlated) with Hartford Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Multifactor has no effect on the direction of ARK Next i.e., ARK Next and Hartford Multifactor go up and down completely randomly.
Pair Corralation between ARK Next and Hartford Multifactor
Given the investment horizon of 90 days ARK Next Generation is expected to generate 2.16 times more return on investment than Hartford Multifactor. However, ARK Next is 2.16 times more volatile than Hartford Multifactor Emerging. It trades about 0.26 of its potential returns per unit of risk. Hartford Multifactor Emerging is currently generating about -0.05 per unit of risk. If you would invest 7,864 in ARK Next Generation on August 29, 2024 and sell it today you would earn a total of 2,774 from holding ARK Next Generation or generate 35.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARK Next Generation vs. Hartford Multifactor Emerging
Performance |
| Timeline |
| ARK Next Generation |
| Hartford Multifactor |
ARK Next and Hartford Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARK Next and Hartford Multifactor
The main advantage of trading using opposite ARK Next and Hartford Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK Next position performs unexpectedly, Hartford Multifactor 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 Multifactor will offset losses from the drop in Hartford Multifactor's long position.| ARK Next vs. ARK Autonomous Technology | ARK Next vs. ARK Genomic Revolution | ARK Next vs. ARK Fintech Innovation | ARK Next vs. ARK Innovation ETF |
| Hartford Multifactor vs. ABIVAX Socit Anonyme | Hartford Multifactor vs. HUMANA INC | Hartford Multifactor vs. SCOR PK | Hartford Multifactor vs. Aquagold International |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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