Correlation Between The Hartford and American Funds
Can any of the company-specific risk be diversified away by investing in both The Hartford and American Funds 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 American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Checks and American Funds American, you can compare the effects of market volatilities on The Hartford and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and American Funds.
Diversification Opportunities for The Hartford and American Funds
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and American is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Checks and American Funds American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds American 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 Checks are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds American has no effect on the direction of The Hartford i.e., The Hartford and American Funds go up and down completely randomly.
Pair Corralation between The Hartford and American Funds
Assuming the 90 days horizon The Hartford is expected to generate 1.72 times less return on investment than American Funds. In addition to that, The Hartford is 1.19 times more volatile than American Funds American. It trades about 0.05 of its total potential returns per unit of risk. American Funds American is currently generating about 0.1 per unit of volatility. If you would invest 2,838 in American Funds American on September 4, 2024 and sell it today you would earn a total of 857.00 from holding American Funds American or generate 30.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Checks vs. American Funds American
Performance |
| Timeline |
| Hartford Checks |
| American Funds American |
The Hartford and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and American Funds
The main advantage of trading using opposite The Hartford and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| The Hartford vs. Europac Gold Fund | The Hartford vs. Short Precious Metals | The Hartford vs. Invesco Gold Special | The Hartford vs. Goldman Sachs Clean |
| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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