Correlation Between Astar and Hartford Multifactor
Can any of the company-specific risk be diversified away by investing in both Astar 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 Astar and Hartford Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Hartford Multifactor Developed, you can compare the effects of market volatilities on Astar 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 Astar with a short position of Hartford Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Hartford Multifactor.
Diversification Opportunities for Astar and Hartford Multifactor
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astar and Hartford is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Hartford Multifactor Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Multifactor 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 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 Astar i.e., Astar and Hartford Multifactor go up and down completely randomly.
Pair Corralation between Astar and Hartford Multifactor
Assuming the 90 days trading horizon Astar is expected to under-perform the Hartford Multifactor. In addition to that, Astar is 6.29 times more volatile than Hartford Multifactor Developed. It trades about -0.26 of its total potential returns per unit of risk. Hartford Multifactor Developed is currently generating about 0.32 per unit of volatility. If you would invest 2,839 in Hartford Multifactor Developed on November 2, 2024 and sell it today you would earn a total of 121.00 from holding Hartford Multifactor Developed or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Astar vs. Hartford Multifactor Developed
Performance |
| Timeline |
| Astar |
| Hartford Multifactor |
Astar and Hartford Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Hartford Multifactor
The main advantage of trading using opposite Astar and Hartford Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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.The idea behind Astar and Hartford Multifactor Developed 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 Multifactor vs. Goldman Sachs ActiveBeta | Hartford Multifactor vs. Hartford Multifactor Equity | Hartford Multifactor vs. iShares Edge MSCI | Hartford Multifactor vs. Hartford Multifactor Emerging |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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