Correlation Between Europac Gold and The Hartford
Can any of the company-specific risk be diversified away by investing in both Europac Gold 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 Europac Gold and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europac Gold Fund and The Hartford Checks, you can compare the effects of market volatilities on Europac Gold 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 Europac Gold with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and The Hartford.
Diversification Opportunities for Europac Gold and The Hartford
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Europac and The is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund and The Hartford Checks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Checks and Europac Gold 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 Europac Gold Fund 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 Checks has no effect on the direction of Europac Gold i.e., Europac Gold and The Hartford go up and down completely randomly.
Pair Corralation between Europac Gold and The Hartford
Assuming the 90 days horizon Europac Gold Fund is expected to generate 3.61 times more return on investment than The Hartford. However, Europac Gold is 3.61 times more volatile than The Hartford Checks. It trades about 0.05 of its potential returns per unit of risk. The Hartford Checks is currently generating about 0.14 per unit of risk. If you would invest 1,010 in Europac Gold Fund on September 5, 2024 and sell it today you would earn a total of 106.00 from holding Europac Gold Fund or generate 10.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europac Gold Fund vs. The Hartford Checks
Performance |
| Timeline |
| Europac Gold |
| Hartford Checks |
Europac Gold and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europac Gold and The Hartford
The main advantage of trading using opposite Europac Gold and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europac Gold 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.| Europac Gold vs. Europac International Value | Europac Gold vs. Europac International Dividend | Europac Gold vs. Ep Emerging Markets | Europac Gold vs. Europac International Bond |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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