Correlation Between Ford and Hartford Growth
Can any of the company-specific risk be diversified away by investing in both Ford and Hartford Growth 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 Ford and Hartford Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Hartford Growth Allocation, you can compare the effects of market volatilities on Ford and Hartford Growth 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 Ford with a short position of Hartford Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Hartford Growth.
Diversification Opportunities for Ford and Hartford Growth
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Hartford is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Hartford Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth Allo and Ford 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 Ford Motor are associated (or correlated) with Hartford Growth. 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 Allo has no effect on the direction of Ford i.e., Ford and Hartford Growth go up and down completely randomly.
Pair Corralation between Ford and Hartford Growth
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Hartford Growth. In addition to that, Ford is 4.46 times more volatile than Hartford Growth Allocation. It trades about 0.0 of its total potential returns per unit of risk. Hartford Growth Allocation is currently generating about 0.14 per unit of volatility. If you would invest 1,513 in Hartford Growth Allocation on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Hartford Growth Allocation or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Hartford Growth Allocation
Performance |
| Timeline |
| Ford Motor |
| Hartford Growth Allo |
Ford and Hartford Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Hartford Growth
The main advantage of trading using opposite Ford and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Hartford Growth 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 Growth will offset losses from the drop in Hartford Growth's long position.The idea behind Ford Motor and Hartford Growth Allocation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hartford Growth vs. Qs Small Capitalization | Hartford Growth vs. Small Midcap Dividend Income | Hartford Growth vs. Baird Smallmid Cap | Hartford Growth vs. Ab Small Cap |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |