Correlation Between Barings Emerging and The Hartford
Can any of the company-specific risk be diversified away by investing in both Barings Emerging 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 Barings Emerging and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Emerging Markets and The Hartford Emerging, you can compare the effects of market volatilities on Barings Emerging 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 Barings Emerging with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and The Hartford.
Diversification Opportunities for Barings Emerging and The Hartford
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and THE is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and The Hartford Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Emerging and Barings Emerging 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 Barings Emerging Markets 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 Emerging has no effect on the direction of Barings Emerging i.e., Barings Emerging and The Hartford go up and down completely randomly.
Pair Corralation between Barings Emerging and The Hartford
Assuming the 90 days horizon Barings Emerging Markets is expected to generate 0.66 times more return on investment than The Hartford. However, Barings Emerging Markets is 1.52 times less risky than The Hartford. It trades about 0.02 of its potential returns per unit of risk. The Hartford Emerging is currently generating about -0.14 per unit of risk. If you would invest 756.00 in Barings Emerging Markets on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Barings Emerging Markets or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Barings Emerging Markets vs. The Hartford Emerging
Performance |
| Timeline |
| Barings Emerging Markets |
| Hartford Emerging |
Barings Emerging and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and The Hartford
The main advantage of trading using opposite Barings Emerging and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging 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.| Barings Emerging vs. T Rowe Price | Barings Emerging vs. Volumetric Fund Volumetric | Barings Emerging vs. Rbb Fund | Barings Emerging vs. T Rowe Price |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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