Correlation Between GM and Hartford Dividend
Can any of the company-specific risk be diversified away by investing in both GM and Hartford Dividend 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 GM and Hartford Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Hartford Dividend And, you can compare the effects of market volatilities on GM and Hartford Dividend 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 GM with a short position of Hartford Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Hartford Dividend.
Diversification Opportunities for GM and Hartford Dividend
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Hartford is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Hartford Dividend And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Dividend And and GM 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 General Motors are associated (or correlated) with Hartford Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Dividend And has no effect on the direction of GM i.e., GM and Hartford Dividend go up and down completely randomly.
Pair Corralation between GM and Hartford Dividend
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.53 times more return on investment than Hartford Dividend. However, GM is 2.53 times more volatile than Hartford Dividend And. It trades about 0.07 of its potential returns per unit of risk. Hartford Dividend And is currently generating about 0.04 per unit of risk. If you would invest 3,536 in General Motors on August 31, 2024 and sell it today you would earn a total of 2,023 from holding General Motors or generate 57.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
General Motors vs. Hartford Dividend And
Performance |
| Timeline |
| General Motors |
| Hartford Dividend And |
GM and Hartford Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Hartford Dividend
The main advantage of trading using opposite GM and Hartford Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Hartford Dividend 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 Dividend will offset losses from the drop in Hartford Dividend's long position.The idea behind General Motors and Hartford Dividend And pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hartford Dividend vs. Qs Large Cap | Hartford Dividend vs. Legg Mason Bw | Hartford Dividend vs. Touchstone Large Cap | Hartford Dividend vs. Principal Lifetime Hybrid |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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