Correlation Between The Hartford and Moderate Strategy
Can any of the company-specific risk be diversified away by investing in both The Hartford and Moderate Strategy 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 The Hartford and Moderate Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Balanced and Moderate Strategy Fund, you can compare the effects of market volatilities on The Hartford and Moderate Strategy 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 The Hartford with a short position of Moderate Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Moderate Strategy.
Diversification Opportunities for The Hartford and Moderate Strategy
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and Moderate is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Balanced and Moderate Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderate Strategy and The Hartford 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 The Hartford Balanced are associated (or correlated) with Moderate Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderate Strategy has no effect on the direction of The Hartford i.e., The Hartford and Moderate Strategy go up and down completely randomly.
Pair Corralation between The Hartford and Moderate Strategy
Assuming the 90 days horizon The Hartford is expected to generate 1.55 times less return on investment than Moderate Strategy. In addition to that, The Hartford is 1.07 times more volatile than Moderate Strategy Fund. It trades about 0.05 of its total potential returns per unit of risk. Moderate Strategy Fund is currently generating about 0.09 per unit of volatility. If you would invest 815.00 in Moderate Strategy Fund on November 19, 2024 and sell it today you would earn a total of 156.00 from holding Moderate Strategy Fund or generate 19.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Balanced vs. Moderate Strategy Fund
Performance |
| Timeline |
| Hartford Balanced |
| Moderate Strategy |
The Hartford and Moderate Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Moderate Strategy
The main advantage of trading using opposite The Hartford and Moderate Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Moderate Strategy 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 Moderate Strategy will offset losses from the drop in Moderate Strategy's long position.| The Hartford vs. Transamerica Cleartrack Retirement | The Hartford vs. Voya Target Retirement | The Hartford vs. College Retirement Equities | The Hartford vs. Retirement Living Through |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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