Correlation Between Fidelity Asset and The Hartford
Can any of the company-specific risk be diversified away by investing in both Fidelity Asset 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 Fidelity Asset and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Asset Manager and The Hartford Small, you can compare the effects of market volatilities on Fidelity Asset 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 Fidelity Asset with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Asset and The Hartford.
Diversification Opportunities for Fidelity Asset and The Hartford
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and The is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Asset Manager and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small and Fidelity Asset 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 Fidelity Asset Manager 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 Small has no effect on the direction of Fidelity Asset i.e., Fidelity Asset and The Hartford go up and down completely randomly.
Pair Corralation between Fidelity Asset and The Hartford
Assuming the 90 days horizon Fidelity Asset is expected to generate 4.97 times less return on investment than The Hartford. But when comparing it to its historical volatility, Fidelity Asset Manager is 5.59 times less risky than The Hartford. It trades about 0.34 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,886 in The Hartford Small on September 2, 2024 and sell it today you would earn a total of 267.00 from holding The Hartford Small or generate 9.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Asset Manager vs. The Hartford Small
Performance |
| Timeline |
| Fidelity Asset Manager |
| Hartford Small |
Fidelity Asset and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Asset and The Hartford
The main advantage of trading using opposite Fidelity Asset and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Asset 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.| Fidelity Asset vs. The Hartford Small | Fidelity Asset vs. Kinetics Small Cap | Fidelity Asset vs. Vanguard Small Cap Growth | Fidelity Asset vs. Fisher Small Cap |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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