Correlation Between Alphabet and The Hartford
Can any of the company-specific risk be diversified away by investing in both Alphabet 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 Alphabet and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and The Hartford Midcap, you can compare the effects of market volatilities on Alphabet 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 Alphabet with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and The Hartford.
Diversification Opportunities for Alphabet and The Hartford
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alphabet and The is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap and Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and The Hartford go up and down completely randomly.
Pair Corralation between Alphabet and The Hartford
Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 1.63 times more return on investment than The Hartford. However, Alphabet is 1.63 times more volatile than The Hartford Midcap. It trades about 0.06 of its potential returns per unit of risk. The Hartford Midcap is currently generating about 0.08 per unit of risk. If you would invest 13,811 in Alphabet Inc Class C on September 2, 2024 and sell it today you would earn a total of 3,238 from holding Alphabet Inc Class C or generate 23.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. The Hartford Midcap
Performance |
| Timeline |
| Alphabet Class C |
| Hartford Midcap |
Alphabet and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and The Hartford
The main advantage of trading using opposite Alphabet and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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.The idea behind Alphabet Inc Class C and The Hartford Midcap 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.| The Hartford vs. Hennessy Nerstone Mid | The Hartford vs. Lord Abbett Small | The Hartford vs. Royce Opportunity Fund | The Hartford vs. Amg River Road |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |