Correlation Between The National and The Hartford
Can any of the company-specific risk be diversified away by investing in both The National 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 The National and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The National Tax Free and The Hartford Value, you can compare the effects of market volatilities on The National 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 The National with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of The National and The Hartford.
Diversification Opportunities for The National and The Hartford
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between The and The is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding The National Tax Free and The Hartford Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Value and The National 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 The National Tax Free 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 Value has no effect on the direction of The National i.e., The National and The Hartford go up and down completely randomly.
Pair Corralation between The National and The Hartford
Assuming the 90 days horizon The National is expected to generate 2.6 times less return on investment than The Hartford. But when comparing it to its historical volatility, The National Tax Free is 3.98 times less risky than The Hartford. It trades about 0.06 of its potential returns per unit of risk. The Hartford Value is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,217 in The Hartford Value on September 5, 2024 and sell it today you would earn a total of 101.00 from holding The Hartford Value or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.51% |
| Values | Daily Returns |
The National Tax Free vs. The Hartford Value
Performance |
| Timeline |
| National Tax |
| Hartford Value |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
The National and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The National and The Hartford
The main advantage of trading using opposite The National and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The National 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.| The National vs. The Missouri Tax Free | The National vs. High Yield Municipal Fund | The National vs. Aquagold International | The National vs. Morningstar Unconstrained Allocation |
| The Hartford vs. Gmo High Yield | The Hartford vs. T Rowe Price | The Hartford vs. The National Tax Free | The Hartford vs. Dreyfusstandish Global Fixed |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |