Correlation Between American Funds and The Hartford
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds The and The Hartford Growth, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and The Hartford.
Diversification Opportunities for American Funds and The Hartford
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and The is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and American Funds 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 American Funds The 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 American Funds i.e., American Funds and The Hartford go up and down completely randomly.
Pair Corralation between American Funds and The Hartford
Assuming the 90 days horizon American Funds is expected to generate 1.1 times less return on investment than The Hartford. But when comparing it to its historical volatility, American Funds The is 1.08 times less risky than The Hartford. It trades about 0.1 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,772 in The Hartford Growth on September 4, 2024 and sell it today you would earn a total of 2,118 from holding The Hartford Growth or generate 56.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
American Funds The vs. The Hartford Growth
Performance |
| Timeline |
| American Funds |
| Hartford Growth |
American Funds and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and The Hartford
The main advantage of trading using opposite American Funds and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Vanguard Financials Index | American Funds vs. Blackrock Financial Institutions | American Funds vs. Fidelity Advisor Financial | American Funds vs. Gabelli Global Financial |
| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |