Correlation Between Hartford Moderate and Columbia Commodity
Can any of the company-specific risk be diversified away by investing in both Hartford Moderate and Columbia Commodity 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 Columbia Commodity 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 Columbia Modity Strategy, you can compare the effects of market volatilities on Hartford Moderate and Columbia Commodity 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 Columbia Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Moderate and Columbia Commodity.
Diversification Opportunities for Hartford Moderate and Columbia Commodity
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HARTFORD and Columbia is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Moderate Allocation and Columbia Modity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Modity Strategy 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 Columbia Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Modity Strategy has no effect on the direction of Hartford Moderate i.e., Hartford Moderate and Columbia Commodity go up and down completely randomly.
Pair Corralation between Hartford Moderate and Columbia Commodity
Assuming the 90 days horizon Hartford Moderate Allocation is expected to generate 0.61 times more return on investment than Columbia Commodity. However, Hartford Moderate Allocation is 1.65 times less risky than Columbia Commodity. It trades about 0.15 of its potential returns per unit of risk. Columbia Modity Strategy is currently generating about 0.03 per unit of risk. If you would invest 1,320 in Hartford Moderate Allocation on August 29, 2024 and sell it today you would earn a total of 20.00 from holding Hartford Moderate Allocation or generate 1.52% 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. Columbia Modity Strategy
Performance |
| Timeline |
| Hartford Moderate |
| Columbia Modity Strategy |
Hartford Moderate and Columbia Commodity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Moderate and Columbia Commodity
The main advantage of trading using opposite Hartford Moderate and Columbia Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Moderate position performs unexpectedly, Columbia Commodity 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 Columbia Commodity will offset losses from the drop in Columbia Commodity's long position.| Hartford Moderate vs. The Hartford Growth | Hartford Moderate vs. Hartford Growth Opportunities | Hartford Moderate vs. The Hartford Growth | Hartford Moderate vs. The Hartford Growth |
| Columbia Commodity vs. Columbia Ultra Short | Columbia Commodity vs. Columbia Integrated Large | Columbia Commodity vs. Columbia Integrated Large | Columbia Commodity vs. Columbia Integrated Large |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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