Correlation Between Hartford Moderate and Great-west Moderately
Can any of the company-specific risk be diversified away by investing in both Hartford Moderate and Great-west Moderately 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 Great-west Moderately 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 Great West Moderately Aggressive, you can compare the effects of market volatilities on Hartford Moderate and Great-west Moderately 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 Great-west Moderately. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Moderate and Great-west Moderately.
Diversification Opportunities for Hartford Moderate and Great-west Moderately
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HARTFORD and Great-west is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Moderate Allocation and Great West Moderately Aggressi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Moderately 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 Great-west Moderately. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Moderately has no effect on the direction of Hartford Moderate i.e., Hartford Moderate and Great-west Moderately go up and down completely randomly.
Pair Corralation between Hartford Moderate and Great-west Moderately
Assuming the 90 days horizon Hartford Moderate is expected to generate 1.31 times less return on investment than Great-west Moderately. But when comparing it to its historical volatility, Hartford Moderate Allocation is 1.09 times less risky than Great-west Moderately. It trades about 0.22 of its potential returns per unit of risk. Great West Moderately Aggressive is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 695.00 in Great West Moderately Aggressive on November 1, 2024 and sell it today you would earn a total of 20.00 from holding Great West Moderately Aggressive or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Moderate Allocation vs. Great West Moderately Aggressi
Performance |
| Timeline |
| Hartford Moderate |
| Great West Moderately |
Hartford Moderate and Great-west Moderately Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Moderate and Great-west Moderately
The main advantage of trading using opposite Hartford Moderate and Great-west Moderately positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Moderate position performs unexpectedly, Great-west Moderately 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 Great-west Moderately will offset losses from the drop in Great-west Moderately's long position.| Hartford Moderate vs. The Hartford Growth | Hartford Moderate vs. The Hartford Growth | Hartford Moderate vs. The Hartford Growth | Hartford Moderate vs. The Hartford Growth |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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