Correlation Between Guidepath(r) Managed and Hartford Inflation
Can any of the company-specific risk be diversified away by investing in both Guidepath(r) Managed and Hartford Inflation 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 Guidepath(r) Managed and Hartford Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidepath Managed Futures and The Hartford Inflation, you can compare the effects of market volatilities on Guidepath(r) Managed and Hartford Inflation 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 Guidepath(r) Managed with a short position of Hartford Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Managed and Hartford Inflation.
Diversification Opportunities for Guidepath(r) Managed and Hartford Inflation
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guidepath(r) and Hartford is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and The Hartford Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Inflation and Guidepath(r) Managed 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 Guidepath Managed Futures are associated (or correlated) with Hartford Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Inflation has no effect on the direction of Guidepath(r) Managed i.e., Guidepath(r) Managed and Hartford Inflation go up and down completely randomly.
Pair Corralation between Guidepath(r) Managed and Hartford Inflation
Assuming the 90 days horizon Guidepath Managed Futures is expected to under-perform the Hartford Inflation. In addition to that, Guidepath(r) Managed is 2.26 times more volatile than The Hartford Inflation. It trades about -0.03 of its total potential returns per unit of risk. The Hartford Inflation is currently generating about 0.05 per unit of volatility. If you would invest 944.00 in The Hartford Inflation on September 4, 2024 and sell it today you would earn a total of 57.00 from holding The Hartford Inflation or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidepath Managed Futures vs. The Hartford Inflation
Performance |
| Timeline |
| Guidepath Managed Futures |
| The Hartford Inflation |
Guidepath(r) Managed and Hartford Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidepath(r) Managed and Hartford Inflation
The main advantage of trading using opposite Guidepath(r) Managed and Hartford Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidepath(r) Managed position performs unexpectedly, Hartford Inflation 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 Inflation will offset losses from the drop in Hartford Inflation's long position.The idea behind Guidepath Managed Futures and The Hartford Inflation 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 Inflation vs. The Hartford Growth | Hartford Inflation vs. The Hartford Growth | Hartford Inflation vs. The Hartford Growth | Hartford Inflation vs. The Hartford Growth |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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