Correlation Between Gmo Small and The Hartford
Can any of the company-specific risk be diversified away by investing in both Gmo Small 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 Gmo Small and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Small Cap and The Hartford Midcap, you can compare the effects of market volatilities on Gmo Small 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 Gmo Small with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Small and The Hartford.
Diversification Opportunities for Gmo Small and The Hartford
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gmo and The is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Small Cap and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap and Gmo Small 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 Gmo Small Cap 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 Midcap has no effect on the direction of Gmo Small i.e., Gmo Small and The Hartford go up and down completely randomly.
Pair Corralation between Gmo Small and The Hartford
Assuming the 90 days horizon Gmo Small is expected to generate 1.25 times less return on investment than The Hartford. In addition to that, Gmo Small is 1.15 times more volatile than The Hartford Midcap. It trades about 0.07 of its total potential returns per unit of risk. The Hartford Midcap is currently generating about 0.1 per unit of volatility. If you would invest 2,707 in The Hartford Midcap on September 3, 2024 and sell it today you would earn a total of 369.00 from holding The Hartford Midcap or generate 13.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Small Cap vs. The Hartford Midcap
Performance |
| Timeline |
| Gmo Small Cap |
| Hartford Midcap |
Gmo Small and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Small and The Hartford
The main advantage of trading using opposite Gmo Small and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Small 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.| Gmo Small vs. The Hartford Midcap | Gmo Small vs. Mfs Emerging Markets | Gmo Small vs. Wells Fargo Special | Gmo Small vs. Washington Mutual Investors |
| The Hartford vs. Europacific Growth Fund | The Hartford vs. Washington Mutual Investors | The Hartford vs. Wells Fargo Special | The Hartford vs. Mfs Emerging Markets |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |