Correlation Between Driehaus Micro and The Hartford
Can any of the company-specific risk be diversified away by investing in both Driehaus Micro 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 Driehaus Micro and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Driehaus Micro Cap and The Hartford Midcap, you can compare the effects of market volatilities on Driehaus Micro 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 Driehaus Micro with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Driehaus Micro and The Hartford.
Diversification Opportunities for Driehaus Micro and The Hartford
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Driehaus and The is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Driehaus Micro Cap and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap and Driehaus Micro 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 Driehaus Micro 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 Midcap has no effect on the direction of Driehaus Micro i.e., Driehaus Micro and The Hartford go up and down completely randomly.
Pair Corralation between Driehaus Micro and The Hartford
Assuming the 90 days horizon Driehaus Micro Cap is expected to generate 1.97 times more return on investment than The Hartford. However, Driehaus Micro is 1.97 times more volatile than The Hartford Midcap. It trades about 0.31 of its potential returns per unit of risk. The Hartford Midcap is currently generating about 0.45 per unit of risk. If you would invest 1,385 in Driehaus Micro Cap on September 4, 2024 and sell it today you would earn a total of 180.00 from holding Driehaus Micro Cap or generate 13.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Driehaus Micro Cap vs. The Hartford Midcap
Performance |
| Timeline |
| Driehaus Micro Cap |
| Hartford Midcap |
Driehaus Micro and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Driehaus Micro and The Hartford
The main advantage of trading using opposite Driehaus Micro and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Driehaus Micro 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.| Driehaus Micro vs. Driehaus Emerging Markets | Driehaus Micro vs. Driehaus Multi Asset Growth | Driehaus Micro vs. Driehaus Small Cap | Driehaus Micro vs. Driehaus Emerging Markets |
| The Hartford vs. Europacific Growth Fund | The Hartford vs. Washington Mutual Investors | The Hartford vs. Wells Fargo Special | The Hartford vs. Mfs Emerging Markets |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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