Correlation Between Hartford Balanced and First Eagle
Can any of the company-specific risk be diversified away by investing in both Hartford Balanced and First Eagle 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 Balanced and First Eagle 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 First Eagle Global, you can compare the effects of market volatilities on Hartford Balanced and First Eagle 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 Balanced with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Balanced and First Eagle.
Diversification Opportunities for Hartford Balanced and First Eagle
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartford and First is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Balanced and First Eagle Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Global and Hartford Balanced 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 First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Global has no effect on the direction of Hartford Balanced i.e., Hartford Balanced and First Eagle go up and down completely randomly.
Pair Corralation between Hartford Balanced and First Eagle
Assuming the 90 days horizon The Hartford Balanced is expected to generate 0.76 times more return on investment than First Eagle. However, The Hartford Balanced is 1.31 times less risky than First Eagle. It trades about 0.13 of its potential returns per unit of risk. First Eagle Global is currently generating about -0.06 per unit of risk. If you would invest 1,511 in The Hartford Balanced on August 29, 2024 and sell it today you would earn a total of 16.00 from holding The Hartford Balanced or generate 1.06% 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. First Eagle Global
Performance |
| Timeline |
| Hartford Balanced |
| First Eagle Global |
Hartford Balanced and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Balanced and First Eagle
The main advantage of trading using opposite Hartford Balanced and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Balanced position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Hartford Balanced vs. Vanguard Wellesley Income | Hartford Balanced vs. HUMANA INC | Hartford Balanced vs. Aquagold International | Hartford Balanced vs. Barloworld Ltd ADR |
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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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