Correlation Between Hartford Moderate and Pax High
Can any of the company-specific risk be diversified away by investing in both Hartford Moderate and Pax High 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 Pax High 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 Pax High Yield, you can compare the effects of market volatilities on Hartford Moderate and Pax High 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 Pax High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Moderate and Pax High.
Diversification Opportunities for Hartford Moderate and Pax High
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartford and Pax is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Moderate Allocation and Pax High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax High Yield 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 Pax High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax High Yield has no effect on the direction of Hartford Moderate i.e., Hartford Moderate and Pax High go up and down completely randomly.
Pair Corralation between Hartford Moderate and Pax High
Assuming the 90 days horizon Hartford Moderate Allocation is expected to generate 2.12 times more return on investment than Pax High. However, Hartford Moderate is 2.12 times more volatile than Pax High Yield. It trades about 0.17 of its potential returns per unit of risk. Pax High Yield is currently generating about 0.19 per unit of risk. If you would invest 1,086 in Hartford Moderate Allocation on September 1, 2024 and sell it today you would earn a total of 262.00 from holding Hartford Moderate Allocation or generate 24.13% 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. Pax High Yield
Performance |
| Timeline |
| Hartford Moderate |
| Pax High Yield |
Hartford Moderate and Pax High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Moderate and Pax High
The main advantage of trading using opposite Hartford Moderate and Pax High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Moderate position performs unexpectedly, Pax High 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 Pax High will offset losses from the drop in Pax High's long position.| Hartford Moderate vs. Eventide Healthcare Life | Hartford Moderate vs. Health Biotchnology Portfolio | Hartford Moderate vs. Highland Longshort Healthcare | Hartford Moderate vs. Allianzgi Health Sciences |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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