Correlation Between Bridge Builder and The Hartford
Can any of the company-specific risk be diversified away by investing in both Bridge Builder 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 Bridge Builder and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridge Builder Smallmid and The Hartford Small, you can compare the effects of market volatilities on Bridge Builder 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 Bridge Builder with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridge Builder and The Hartford.
Diversification Opportunities for Bridge Builder and The Hartford
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bridge and The is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Bridge Builder Smallmid and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small and Bridge Builder 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 Bridge Builder Smallmid 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 Small has no effect on the direction of Bridge Builder i.e., Bridge Builder and The Hartford go up and down completely randomly.
Pair Corralation between Bridge Builder and The Hartford
Assuming the 90 days horizon Bridge Builder is expected to generate 1.07 times less return on investment than The Hartford. But when comparing it to its historical volatility, Bridge Builder Smallmid is 1.25 times less risky than The Hartford. It trades about 0.23 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 5,039 in The Hartford Small on August 29, 2024 and sell it today you would earn a total of 361.00 from holding The Hartford Small or generate 7.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridge Builder Smallmid vs. The Hartford Small
Performance |
| Timeline |
| Bridge Builder Smallmid |
| Hartford Small |
Bridge Builder and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridge Builder and The Hartford
The main advantage of trading using opposite Bridge Builder and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridge Builder 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.| Bridge Builder vs. Vanguard Mid Cap Value | Bridge Builder vs. HUMANA INC | Bridge Builder vs. Aquagold International | Bridge Builder vs. Barloworld Ltd ADR |
| The Hartford vs. Vanguard Strategic Small Cap | The Hartford vs. Small Midcap Dividend Income | The Hartford vs. Qs Small Capitalization | The Hartford vs. Kinetics Small Cap |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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