Correlation Between Glg Intl and The Hartford
Can any of the company-specific risk be diversified away by investing in both Glg Intl 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 Glg Intl and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glg Intl Small and The Hartford Small, you can compare the effects of market volatilities on Glg Intl 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 Glg Intl with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and The Hartford.
Diversification Opportunities for Glg Intl and The Hartford
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glg and THE is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small and Glg Intl 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 Glg Intl Small 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 Glg Intl i.e., Glg Intl and The Hartford go up and down completely randomly.
Pair Corralation between Glg Intl and The Hartford
Assuming the 90 days horizon Glg Intl is expected to generate 12.56 times less return on investment than The Hartford. But when comparing it to its historical volatility, Glg Intl Small is 1.42 times less risky than The Hartford. It trades about 0.02 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,891 in The Hartford Small on August 24, 2024 and sell it today you would earn a total of 173.00 from holding The Hartford Small or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Glg Intl Small vs. The Hartford Small
Performance |
| Timeline |
| Glg Intl Small |
| Hartford Small |
Glg Intl and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glg Intl and The Hartford
The main advantage of trading using opposite Glg Intl and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl 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.| Glg Intl vs. American Century High | Glg Intl vs. Multi Manager High Yield | Glg Intl vs. Artisan High Income | Glg Intl vs. Virtus High Yield |
| The Hartford vs. Vanguard Small Cap Growth | The Hartford vs. Vanguard Small Cap Growth | The Hartford vs. Vanguard Explorer Fund | The Hartford vs. Vanguard Explorer 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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