Correlation Between Hartford Dividend and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Hartford Dividend and Franklin Federal 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 Dividend and Franklin Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Dividend and Franklin Federal Tax Free, you can compare the effects of market volatilities on Hartford Dividend and Franklin Federal 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 Dividend with a short position of Franklin Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Dividend and Franklin Federal.
Diversification Opportunities for Hartford Dividend and Franklin Federal
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hartford and Franklin is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Dividend and Franklin Federal Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Tax and Hartford Dividend 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 Dividend are associated (or correlated) with Franklin Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Tax has no effect on the direction of Hartford Dividend i.e., Hartford Dividend and Franklin Federal go up and down completely randomly.
Pair Corralation between Hartford Dividend and Franklin Federal
Assuming the 90 days horizon The Hartford Dividend is expected to generate 2.7 times more return on investment than Franklin Federal. However, Hartford Dividend is 2.7 times more volatile than Franklin Federal Tax Free. It trades about 0.26 of its potential returns per unit of risk. Franklin Federal Tax Free is currently generating about 0.02 per unit of risk. If you would invest 3,322 in The Hartford Dividend on October 24, 2024 and sell it today you would earn a total of 100.00 from holding The Hartford Dividend or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
The Hartford Dividend vs. Franklin Federal Tax Free
Performance |
| Timeline |
| Hartford Dividend |
| Franklin Federal Tax |
Hartford Dividend and Franklin Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Dividend and Franklin Federal
The main advantage of trading using opposite Hartford Dividend and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Dividend position performs unexpectedly, Franklin Federal 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 Franklin Federal will offset losses from the drop in Franklin Federal's long position.| Hartford Dividend vs. Fxybjx | Hartford Dividend vs. Wmcapx | Hartford Dividend vs. Fpddjx | Hartford Dividend vs. Abr 7525 Volatility |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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