Correlation Between Hartford Moderate and Highland Longshort
Can any of the company-specific risk be diversified away by investing in both Hartford Moderate and Highland Longshort 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 Highland Longshort 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 Highland Longshort Healthcare, you can compare the effects of market volatilities on Hartford Moderate and Highland Longshort 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 Highland Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Moderate and Highland Longshort.
Diversification Opportunities for Hartford Moderate and Highland Longshort
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hartford and Highland is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Moderate Allocation and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Longshort 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 Highland Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Longshort has no effect on the direction of Hartford Moderate i.e., Hartford Moderate and Highland Longshort go up and down completely randomly.
Pair Corralation between Hartford Moderate and Highland Longshort
Assuming the 90 days horizon Hartford Moderate Allocation is expected to generate 2.52 times more return on investment than Highland Longshort. However, Hartford Moderate is 2.52 times more volatile than Highland Longshort Healthcare. It trades about 0.14 of its potential returns per unit of risk. Highland Longshort Healthcare is currently generating about 0.26 per unit of risk. If you would invest 1,289 in Hartford Moderate Allocation on November 7, 2024 and sell it today you would earn a total of 21.00 from holding Hartford Moderate Allocation or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Hartford Moderate Allocation vs. Highland Longshort Healthcare
Performance |
| Timeline |
| Hartford Moderate |
| Highland Longshort |
Hartford Moderate and Highland Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Moderate and Highland Longshort
The main advantage of trading using opposite Hartford Moderate and Highland Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Moderate position performs unexpectedly, Highland Longshort 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 Highland Longshort will offset losses from the drop in Highland Longshort's long position.| Hartford Moderate vs. Firsthand Technology Opportunities | Hartford Moderate vs. Invesco Technology Fund | Hartford Moderate vs. Red Oak Technology | Hartford Moderate vs. Allianzgi Technology Fund |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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