Correlation Between Short Duration and The Hartford
Can any of the company-specific risk be diversified away by investing in both Short Duration 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 Short Duration and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Duration Strategic and The Hartford Inflation, you can compare the effects of market volatilities on Short Duration 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 Short Duration with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Duration and The Hartford.
Diversification Opportunities for Short Duration and The Hartford
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Short and The is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Short Duration Strategic 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 Short Duration 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 Short Duration Strategic 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 The Hartford Inflation has no effect on the direction of Short Duration i.e., Short Duration and The Hartford go up and down completely randomly.
Pair Corralation between Short Duration and The Hartford
Assuming the 90 days horizon Short Duration Strategic is expected to generate 0.53 times more return on investment than The Hartford. However, Short Duration Strategic is 1.88 times less risky than The Hartford. It trades about 0.16 of its potential returns per unit of risk. The Hartford Inflation is currently generating about 0.07 per unit of risk. If you would invest 848.00 in Short Duration Strategic on September 2, 2024 and sell it today you would earn a total of 49.00 from holding Short Duration Strategic or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Duration Strategic vs. The Hartford Inflation
Performance |
| Timeline |
| Short Duration Strategic |
| The Hartford Inflation |
Short Duration and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Duration and The Hartford
The main advantage of trading using opposite Short Duration and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Duration 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.| Short Duration vs. Diversified Bond Fund | Short Duration vs. High Yield Fund Investor | Short Duration vs. Short Duration Inflation | Short Duration vs. Core Plus Fund |
| The Hartford vs. Hartford Growth Opportunities | The Hartford vs. The Hartford Growth | The Hartford vs. Hartford Global Impact | The Hartford vs. Hartford Global Impact |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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