Correlation Between Dunham Large and The Hartford
Can any of the company-specific risk be diversified away by investing in both Dunham Large 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 Dunham Large and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Large Cap and The Hartford Growth, you can compare the effects of market volatilities on Dunham Large 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 Dunham Large with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and The Hartford.
Diversification Opportunities for Dunham Large and The Hartford
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dunham and The is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Dunham Large 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 Dunham Large Cap 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 Growth has no effect on the direction of Dunham Large i.e., Dunham Large and The Hartford go up and down completely randomly.
Pair Corralation between Dunham Large and The Hartford
Assuming the 90 days horizon Dunham Large is expected to generate 2.03 times less return on investment than The Hartford. But when comparing it to its historical volatility, Dunham Large Cap is 1.72 times less risky than The Hartford. It trades about 0.18 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 6,469 in The Hartford Growth on September 2, 2024 and sell it today you would earn a total of 994.00 from holding The Hartford Growth or generate 15.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Large Cap vs. The Hartford Growth
Performance |
| Timeline |
| Dunham Large Cap |
| Hartford Growth |
Dunham Large and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Large and The Hartford
The main advantage of trading using opposite Dunham Large and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large 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.| Dunham Large vs. Dunham Dynamic Macro | Dunham Large vs. Dunham Appreciation Income | Dunham Large vs. Dunham Small Cap | Dunham Large vs. Dunham Emerging Markets |
| The Hartford vs. The Hartford Dividend | The Hartford vs. The Hartford Capital | The Hartford vs. The Hartford Equity | The Hartford vs. The Hartford Midcap |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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