Correlation Between Xtrackers MSCI and Hartford Multifactor
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and Hartford Multifactor 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 Xtrackers MSCI and Hartford Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI EAFE and Hartford Multifactor Developed, you can compare the effects of market volatilities on Xtrackers MSCI and Hartford Multifactor 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 Xtrackers MSCI with a short position of Hartford Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and Hartford Multifactor.
Diversification Opportunities for Xtrackers MSCI and Hartford Multifactor
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and Hartford is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI EAFE and Hartford Multifactor Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Multifactor and Xtrackers MSCI 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 Xtrackers MSCI EAFE are associated (or correlated) with Hartford Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Multifactor has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and Hartford Multifactor go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and Hartford Multifactor
Given the investment horizon of 90 days Xtrackers MSCI EAFE is expected to under-perform the Hartford Multifactor. In addition to that, Xtrackers MSCI is 1.16 times more volatile than Hartford Multifactor Developed. It trades about -0.01 of its total potential returns per unit of risk. Hartford Multifactor Developed is currently generating about 0.02 per unit of volatility. If you would invest 2,925 in Hartford Multifactor Developed on November 2, 2024 and sell it today you would earn a total of 35.00 from holding Hartford Multifactor Developed or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Xtrackers MSCI EAFE vs. Hartford Multifactor Developed
Performance |
| Timeline |
| Xtrackers MSCI EAFE |
| Hartford Multifactor |
Xtrackers MSCI and Hartford Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and Hartford Multifactor
The main advantage of trading using opposite Xtrackers MSCI and Hartford Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, Hartford Multifactor 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 Hartford Multifactor will offset losses from the drop in Hartford Multifactor's long position.| Xtrackers MSCI vs. Fidelity International High | Xtrackers MSCI vs. Global X MSCI | Xtrackers MSCI vs. Xtrackers USD High | Xtrackers MSCI vs. First Trust Dow |
| Hartford Multifactor vs. Goldman Sachs ActiveBeta | Hartford Multifactor vs. Hartford Multifactor Equity | Hartford Multifactor vs. iShares Edge MSCI | Hartford Multifactor vs. Hartford Multifactor Emerging |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |