Correlation Between Hartford Moderate and Cullen Emerging
Can any of the company-specific risk be diversified away by investing in both Hartford Moderate and Cullen Emerging 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 Cullen Emerging 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 Cullen Emerging Markets, you can compare the effects of market volatilities on Hartford Moderate and Cullen Emerging 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 Cullen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Moderate and Cullen Emerging.
Diversification Opportunities for Hartford Moderate and Cullen Emerging
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HARTFORD and Cullen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Moderate Allocation and Cullen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Emerging Markets 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 Cullen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Emerging Markets has no effect on the direction of Hartford Moderate i.e., Hartford Moderate and Cullen Emerging go up and down completely randomly.
Pair Corralation between Hartford Moderate and Cullen Emerging
Assuming the 90 days horizon Hartford Moderate is expected to generate 1.6 times less return on investment than Cullen Emerging. But when comparing it to its historical volatility, Hartford Moderate Allocation is 1.45 times less risky than Cullen Emerging. It trades about 0.08 of its potential returns per unit of risk. Cullen Emerging Markets is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 926.00 in Cullen Emerging Markets on August 26, 2024 and sell it today you would earn a total of 344.00 from holding Cullen Emerging Markets or generate 37.15% 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. Cullen Emerging Markets
Performance |
| Timeline |
| Hartford Moderate |
| Cullen Emerging Markets |
Hartford Moderate and Cullen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Moderate and Cullen Emerging
The main advantage of trading using opposite Hartford Moderate and Cullen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Moderate position performs unexpectedly, Cullen Emerging 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 Cullen Emerging will offset losses from the drop in Cullen Emerging'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 |
| Cullen Emerging vs. Hartford Moderate Allocation | Cullen Emerging vs. Fidelity Managed Retirement | Cullen Emerging vs. Pro Blend Moderate Term | Cullen Emerging vs. Blackrock Moderate Prepared |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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