Correlation Between Hartford Moderate and Target Retirement
Can any of the company-specific risk be diversified away by investing in both Hartford Moderate and Target Retirement 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 Target Retirement 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 Target Retirement 2040, you can compare the effects of market volatilities on Hartford Moderate and Target Retirement 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 Target Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Moderate and Target Retirement.
Diversification Opportunities for Hartford Moderate and Target Retirement
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HARTFORD and Target is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Moderate Allocation and Target Retirement 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Retirement 2040 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 Target Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Retirement 2040 has no effect on the direction of Hartford Moderate i.e., Hartford Moderate and Target Retirement go up and down completely randomly.
Pair Corralation between Hartford Moderate and Target Retirement
Assuming the 90 days horizon Hartford Moderate Allocation is expected to generate 0.85 times more return on investment than Target Retirement. However, Hartford Moderate Allocation is 1.17 times less risky than Target Retirement. It trades about 0.1 of its potential returns per unit of risk. Target Retirement 2040 is currently generating about 0.02 per unit of risk. If you would invest 1,319 in Hartford Moderate Allocation on August 25, 2024 and sell it today you would earn a total of 13.00 from holding Hartford Moderate Allocation or generate 0.99% 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. Target Retirement 2040
Performance |
| Timeline |
| Hartford Moderate |
| Target Retirement 2040 |
Hartford Moderate and Target Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Moderate and Target Retirement
The main advantage of trading using opposite Hartford Moderate and Target Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Moderate position performs unexpectedly, Target Retirement 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 Target Retirement will offset losses from the drop in Target Retirement's long position.| Hartford Moderate vs. American Funds American | Hartford Moderate vs. American Funds American | Hartford Moderate vs. American Balanced | Hartford Moderate vs. American Balanced Fund |
| Target Retirement vs. Vanguard Target Retirement | Target Retirement vs. American Funds 2040 | Target Retirement vs. American Funds 2040 | Target Retirement vs. American Funds 2040 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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