Correlation Between Astar and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both Astar and Hartford Financial 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 Astar and Hartford Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Hartford Financial Services, you can compare the effects of market volatilities on Astar and Hartford Financial 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 Astar with a short position of Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Hartford Financial.
Diversification Opportunities for Astar and Hartford Financial
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Astar and Hartford is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Hartford Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Financial and Astar 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 Astar are associated (or correlated) with Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Financial has no effect on the direction of Astar i.e., Astar and Hartford Financial go up and down completely randomly.
Pair Corralation between Astar and Hartford Financial
Assuming the 90 days trading horizon Astar is expected to generate 4.86 times more return on investment than Hartford Financial. However, Astar is 4.86 times more volatile than Hartford Financial Services. It trades about -0.01 of its potential returns per unit of risk. Hartford Financial Services is currently generating about -0.27 per unit of risk. If you would invest 6.98 in Astar on October 9, 2024 and sell it today you would lose (0.25) from holding Astar or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Astar vs. Hartford Financial Services
Performance |
| Timeline |
| Astar |
| Hartford Financial |
Astar and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Hartford Financial
The main advantage of trading using opposite Astar and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Hartford Financial 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 Financial will offset losses from the drop in Hartford Financial's long position.The idea behind Astar and Hartford Financial Services pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hartford Financial vs. Walmart | Hartford Financial vs. BYD Co | Hartford Financial vs. Volkswagen AG | Hartford Financial vs. Volkswagen AG Non Vtg |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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