Correlation Between Hartford High and Hartford Growth

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Can any of the company-specific risk be diversified away by investing in both Hartford High and Hartford Growth 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 Hartford High and Hartford Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford High and The Hartford Growth, you can compare the effects of market volatilities on Hartford High and Hartford Growth 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 Hartford High with a short position of Hartford Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford High and Hartford Growth.

Diversification Opportunities for Hartford High and Hartford Growth

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Hartford and Hartford is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford High and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Hartford High 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 The Hartford High are associated (or correlated) with Hartford Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Hartford High i.e., Hartford High and Hartford Growth go up and down completely randomly.

Pair Corralation between Hartford High and Hartford Growth

Assuming the 90 days horizon Hartford High is expected to generate 8.48 times less return on investment than Hartford Growth. But when comparing it to its historical volatility, The Hartford High is 7.64 times less risky than Hartford Growth. It trades about 0.21 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  6,565  in The Hartford Growth on September 13, 2024 and sell it today you would earn a total of  322.00  from holding The Hartford Growth or generate 4.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

The Hartford High  vs.  The Hartford Growth

 Performance 
       Timeline  
Hartford High 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford High are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hartford High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Hartford Growth 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Hartford Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Hartford High and Hartford Growth Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hartford High and Hartford Growth

The main advantage of trading using opposite Hartford High and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford High position performs unexpectedly, Hartford Growth 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 Growth will offset losses from the drop in Hartford Growth's long position.
The idea behind The Hartford High and The Hartford Growth 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.
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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