Correlation Between The Hartford and M Large
Can any of the company-specific risk be diversified away by investing in both The Hartford and M Large 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 M Large 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 M Large Cap, you can compare the effects of market volatilities on The Hartford and M Large 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 M Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and M Large.
Diversification Opportunities for The Hartford and M Large
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between The and MTCGX is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Balanced and M Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Large Cap 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 M Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Large Cap has no effect on the direction of The Hartford i.e., The Hartford and M Large go up and down completely randomly.
Pair Corralation between The Hartford and M Large
Assuming the 90 days horizon The Hartford is expected to generate 2.64 times less return on investment than M Large. But when comparing it to its historical volatility, The Hartford Balanced is 2.93 times less risky than M Large. It trades about 0.07 of its potential returns per unit of risk. M Large Cap is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,312 in M Large Cap on November 30, 2024 and sell it today you would earn a total of 994.00 from holding M Large Cap or generate 42.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Balanced vs. M Large Cap
Performance |
| Timeline |
| Hartford Balanced |
| M Large Cap |
The Hartford and M Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and M Large
The main advantage of trading using opposite The Hartford and M Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, M Large 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 M Large will offset losses from the drop in M Large's long position.| The Hartford vs. Wisdomtree Siegel Moderate | The Hartford vs. Fidelity Managed Retirement | The Hartford vs. Vanguard Target Retirement | The Hartford vs. Dimensional Retirement Income |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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