Correlation Between American Funds and Hartford Checks
Can any of the company-specific risk be diversified away by investing in both American Funds and Hartford Checks 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 Hartford Checks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Conservative and The Hartford Checks, you can compare the effects of market volatilities on American Funds and Hartford Checks 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 Hartford Checks. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Hartford Checks.
Diversification Opportunities for American Funds and Hartford Checks
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Hartford is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Conservative and The Hartford Checks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Checks 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 Conservative are associated (or correlated) with Hartford Checks. 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 American Funds i.e., American Funds and Hartford Checks go up and down completely randomly.
Pair Corralation between American Funds and Hartford Checks
Assuming the 90 days horizon American Funds is expected to generate 1.18 times less return on investment than Hartford Checks. But when comparing it to its historical volatility, American Funds Conservative is 1.41 times less risky than Hartford Checks. It trades about 0.11 of its potential returns per unit of risk. The Hartford Checks is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 845.00 in The Hartford Checks on September 13, 2024 and sell it today you would earn a total of 218.00 from holding The Hartford Checks or generate 25.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Conservative vs. The Hartford Checks
Performance |
| Timeline |
| American Funds Conse |
| Hartford Checks |
American Funds and Hartford Checks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Hartford Checks
The main advantage of trading using opposite American Funds and Hartford Checks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Hartford Checks 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 Checks will offset losses from the drop in Hartford Checks' long position.| American Funds vs. Franklin Growth Opportunities | American Funds vs. Small Pany Growth | American Funds vs. Smallcap Growth Fund | American Funds vs. Chase Growth Fund |
| Hartford Checks vs. The Hartford Growth | Hartford Checks vs. The Hartford Growth | Hartford Checks vs. The Hartford Growth | Hartford Checks 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |