Correlation Between American Funds and Hartford Global
Can any of the company-specific risk be diversified away by investing in both American Funds and Hartford Global 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 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Smallcap and Hartford Global Impact, you can compare the effects of market volatilities on American Funds and Hartford Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Hartford Global.
Diversification Opportunities for American Funds and Hartford Global
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Hartford is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Smallcap and Hartford Global Impact in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Global Impact 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 Smallcap are associated (or correlated) with Hartford Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Global Impact has no effect on the direction of American Funds i.e., American Funds and Hartford Global go up and down completely randomly.
Pair Corralation between American Funds and Hartford Global
Assuming the 90 days horizon American Funds Smallcap is expected to generate 1.08 times more return on investment than Hartford Global. However, American Funds is 1.08 times more volatile than Hartford Global Impact. It trades about 0.05 of its potential returns per unit of risk. Hartford Global Impact is currently generating about 0.06 per unit of risk. If you would invest 5,817 in American Funds Smallcap on September 3, 2024 and sell it today you would earn a total of 1,410 from holding American Funds Smallcap or generate 24.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Smallcap vs. Hartford Global Impact
Performance |
| Timeline |
| American Funds Smallcap |
| Hartford Global Impact |
American Funds and Hartford Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Hartford Global
The main advantage of trading using opposite American Funds and Hartford Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Hartford Global 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 Global will offset losses from the drop in Hartford Global's long position.| American Funds vs. Short Term Government Fund | American Funds vs. Us Government Securities | American Funds vs. Prudential Government Income | American Funds vs. Government Securities Fund |
| Hartford Global vs. Omni Small Cap Value | Hartford Global vs. Commonwealth Global Fund | Hartford Global vs. Balanced Fund Investor | Hartford Global vs. Ab Value 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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