Correlation Between Power Global and The Hartford
Can any of the company-specific risk be diversified away by investing in both Power Global 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 Power Global and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Global Tactical and The Hartford Checks, you can compare the effects of market volatilities on Power Global 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 Power Global with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Global and The Hartford.
Diversification Opportunities for Power Global and The Hartford
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Power and The is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Power Global Tactical and The Hartford Checks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Checks and Power Global 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 Power Global Tactical 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 Checks has no effect on the direction of Power Global i.e., Power Global and The Hartford go up and down completely randomly.
Pair Corralation between Power Global and The Hartford
Assuming the 90 days horizon Power Global is expected to generate 1.19 times less return on investment than The Hartford. But when comparing it to its historical volatility, Power Global Tactical is 1.11 times less risky than The Hartford. It trades about 0.13 of its potential returns per unit of risk. The Hartford Checks is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 982.00 in The Hartford Checks on September 1, 2024 and sell it today you would earn a total of 88.00 from holding The Hartford Checks or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Power Global Tactical vs. The Hartford Checks
Performance |
| Timeline |
| Power Global Tactical |
| Hartford Checks |
Power Global and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Global and The Hartford
The main advantage of trading using opposite Power Global and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Global 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.| Power Global vs. Old Westbury Large | Power Global vs. Principal Lifetime Hybrid | Power Global vs. Aqr Large Cap | Power Global vs. Jhancock Disciplined Value |
| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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