Correlation Between Columbia Moderate and Hartford Small
Can any of the company-specific risk be diversified away by investing in both Columbia Moderate and Hartford Small 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 Columbia Moderate and Hartford Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Moderate Growth and Hartford Small Cap, you can compare the effects of market volatilities on Columbia Moderate and Hartford Small 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 Columbia Moderate with a short position of Hartford Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Moderate and Hartford Small.
Diversification Opportunities for Columbia Moderate and Hartford Small
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and Hartford is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Moderate Growth and Hartford Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small Cap and Columbia Moderate 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 Columbia Moderate Growth are associated (or correlated) with Hartford Small. 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 Cap has no effect on the direction of Columbia Moderate i.e., Columbia Moderate and Hartford Small go up and down completely randomly.
Pair Corralation between Columbia Moderate and Hartford Small
Assuming the 90 days horizon Columbia Moderate is expected to generate 1.11 times less return on investment than Hartford Small. But when comparing it to its historical volatility, Columbia Moderate Growth is 2.51 times less risky than Hartford Small. It trades about 0.06 of its potential returns per unit of risk. Hartford Small Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,262 in Hartford Small Cap on October 26, 2024 and sell it today you would earn a total of 22.00 from holding Hartford Small Cap or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Moderate Growth vs. Hartford Small Cap
Performance |
| Timeline |
| Columbia Moderate Growth |
| Hartford Small Cap |
Columbia Moderate and Hartford Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Moderate and Hartford Small
The main advantage of trading using opposite Columbia Moderate and Hartford Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Moderate position performs unexpectedly, Hartford Small 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 Small will offset losses from the drop in Hartford Small's long position.| Columbia Moderate vs. Vanguard Total Stock | Columbia Moderate vs. Vanguard 500 Index | Columbia Moderate vs. Vanguard Total Stock | Columbia Moderate vs. Vanguard Total Stock |
| Hartford Small vs. Quantitative Longshort Equity | Hartford Small vs. Gmo Global Equity | Hartford Small vs. Aqr Long Short Equity | Hartford Small vs. Siit Equity Factor |
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.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |