Correlation Between Hartford Moderate and Ishares Municipal
Can any of the company-specific risk be diversified away by investing in both Hartford Moderate and Ishares Municipal 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 Moderate and Ishares Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Moderate Allocation and Ishares Municipal Bond, you can compare the effects of market volatilities on Hartford Moderate and Ishares Municipal 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 Moderate with a short position of Ishares Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Moderate and Ishares Municipal.
Diversification Opportunities for Hartford Moderate and Ishares Municipal
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartford and Ishares is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Moderate Allocation and Ishares Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Municipal Bond and Hartford Moderate 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 Hartford Moderate Allocation are associated (or correlated) with Ishares Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Municipal Bond has no effect on the direction of Hartford Moderate i.e., Hartford Moderate and Ishares Municipal go up and down completely randomly.
Pair Corralation between Hartford Moderate and Ishares Municipal
Assuming the 90 days horizon Hartford Moderate Allocation is expected to generate 2.53 times more return on investment than Ishares Municipal. However, Hartford Moderate is 2.53 times more volatile than Ishares Municipal Bond. It trades about 0.18 of its potential returns per unit of risk. Ishares Municipal Bond is currently generating about -0.04 per unit of risk. If you would invest 1,285 in Hartford Moderate Allocation on November 4, 2024 and sell it today you would earn a total of 24.00 from holding Hartford Moderate Allocation or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Moderate Allocation vs. Ishares Municipal Bond
Performance |
| Timeline |
| Hartford Moderate |
| Ishares Municipal Bond |
Hartford Moderate and Ishares Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Moderate and Ishares Municipal
The main advantage of trading using opposite Hartford Moderate and Ishares Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Moderate position performs unexpectedly, Ishares Municipal 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 Ishares Municipal will offset losses from the drop in Ishares Municipal's long position.| Hartford Moderate vs. Angel Oak Multi Strategy | Hartford Moderate vs. Growth Strategy Fund | Hartford Moderate vs. Barings Emerging Markets | Hartford Moderate vs. Vy Jpmorgan Emerging |
| Ishares Municipal vs. Needham Aggressive Growth | Ishares Municipal vs. Pace High Yield | Ishares Municipal vs. Ironclad Managed Risk | Ishares Municipal vs. One Choice Portfolio |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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