Correlation Between First Trust and Hartford Short
Can any of the company-specific risk be diversified away by investing in both First Trust and Hartford Short 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 First Trust and Hartford Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust TCW and Hartford Short Duration, you can compare the effects of market volatilities on First Trust and Hartford Short 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 First Trust with a short position of Hartford Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Hartford Short.
Diversification Opportunities for First Trust and Hartford Short
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Hartford is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding First Trust TCW and Hartford Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Short Duration and First Trust 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 First Trust TCW are associated (or correlated) with Hartford Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Short Duration has no effect on the direction of First Trust i.e., First Trust and Hartford Short go up and down completely randomly.
Pair Corralation between First Trust and Hartford Short
Given the investment horizon of 90 days First Trust is expected to generate 1.76 times less return on investment than Hartford Short. In addition to that, First Trust is 3.33 times more volatile than Hartford Short Duration. It trades about 0.03 of its total potential returns per unit of risk. Hartford Short Duration is currently generating about 0.18 per unit of volatility. If you would invest 3,443 in Hartford Short Duration on August 30, 2024 and sell it today you would earn a total of 462.00 from holding Hartford Short Duration or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust TCW vs. Hartford Short Duration
Performance |
| Timeline |
| First Trust TCW |
| Hartford Short Duration |
First Trust and Hartford Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Hartford Short
The main advantage of trading using opposite First Trust and Hartford Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Hartford Short 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 Short will offset losses from the drop in Hartford Short's long position.| First Trust vs. First Trust Low | First Trust vs. First Trust Enhanced | First Trust vs. First Trust Tactical | First Trust vs. First Trust Managed |
| Hartford Short vs. Rbb Fund | Hartford Short vs. US Treasury 12 | Hartford Short vs. Rbb Fund | Hartford Short vs. Rbb Fund |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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