Correlation Between Cutler Equity and The Hartford
Can any of the company-specific risk be diversified away by investing in both Cutler Equity 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 Cutler Equity and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutler Equity and The Hartford Equity, you can compare the effects of market volatilities on Cutler Equity 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 Cutler Equity with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutler Equity and The Hartford.
Diversification Opportunities for Cutler Equity and The Hartford
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cutler and The is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Cutler Equity and The Hartford Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Equity and Cutler Equity 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 Cutler Equity 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 Equity has no effect on the direction of Cutler Equity i.e., Cutler Equity and The Hartford go up and down completely randomly.
Pair Corralation between Cutler Equity and The Hartford
Assuming the 90 days horizon Cutler Equity is expected to generate 1.07 times more return on investment than The Hartford. However, Cutler Equity is 1.07 times more volatile than The Hartford Equity. It trades about 0.24 of its potential returns per unit of risk. The Hartford Equity is currently generating about 0.18 per unit of risk. If you would invest 2,823 in Cutler Equity on August 30, 2024 and sell it today you would earn a total of 111.00 from holding Cutler Equity or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cutler Equity vs. The Hartford Equity
Performance |
| Timeline |
| Cutler Equity |
| Hartford Equity |
Cutler Equity and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutler Equity and The Hartford
The main advantage of trading using opposite Cutler Equity and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutler Equity 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.| Cutler Equity vs. 1919 Financial Services | Cutler Equity vs. Mesirow Financial Small | Cutler Equity vs. Vanguard Financials Index | Cutler Equity vs. Gabelli Global Financial |
| The Hartford vs. The Hartford Dividend | The Hartford vs. The Hartford Total | The Hartford vs. The Hartford International | 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 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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