Correlation Between Omni Small-cap and The Hartford
Can any of the company-specific risk be diversified away by investing in both Omni Small-cap 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 Omni Small-cap and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omni Small Cap Value and The Hartford Small, you can compare the effects of market volatilities on Omni Small-cap 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 Omni Small-cap with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Small-cap and The Hartford.
Diversification Opportunities for Omni Small-cap and The Hartford
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Omni and THE is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Omni Small Cap Value and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small and Omni Small-cap 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 Omni Small Cap Value 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 Omni Small-cap i.e., Omni Small-cap and The Hartford go up and down completely randomly.
Pair Corralation between Omni Small-cap and The Hartford
Assuming the 90 days horizon Omni Small-cap is expected to generate 1.14 times less return on investment than The Hartford. In addition to that, Omni Small-cap is 1.23 times more volatile than The Hartford Small. It trades about 0.1 of its total potential returns per unit of risk. The Hartford Small is currently generating about 0.14 per unit of volatility. If you would invest 2,855 in The Hartford Small on August 28, 2024 and sell it today you would earn a total of 307.00 from holding The Hartford Small or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omni Small Cap Value vs. The Hartford Small
Performance |
| Timeline |
| Omni Small Cap |
| Hartford Small |
Omni Small-cap and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omni Small-cap and The Hartford
The main advantage of trading using opposite Omni Small-cap and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Small-cap 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.| Omni Small-cap vs. Aggressive Investors 1 | Omni Small-cap vs. Managed Volatility Fund | Omni Small-cap vs. Small Cap Value Fund |
| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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