Correlation Between Hartford Schroders and Nationwide Highmark
Can any of the company-specific risk be diversified away by investing in both Hartford Schroders and Nationwide Highmark 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 Schroders and Nationwide Highmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Schroders Smallmid and Nationwide Highmark Small, you can compare the effects of market volatilities on Hartford Schroders and Nationwide Highmark 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 Schroders with a short position of Nationwide Highmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Schroders and Nationwide Highmark.
Diversification Opportunities for Hartford Schroders and Nationwide Highmark
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartford and Nationwide is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Schroders Smallmid and Nationwide Highmark Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Highmark Small and Hartford Schroders 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 Hartford Schroders Smallmid are associated (or correlated) with Nationwide Highmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Highmark Small has no effect on the direction of Hartford Schroders i.e., Hartford Schroders and Nationwide Highmark go up and down completely randomly.
Pair Corralation between Hartford Schroders and Nationwide Highmark
Assuming the 90 days horizon Hartford Schroders Smallmid is expected to under-perform the Nationwide Highmark. In addition to that, Hartford Schroders is 1.76 times more volatile than Nationwide Highmark Small. It trades about -0.16 of its total potential returns per unit of risk. Nationwide Highmark Small is currently generating about 0.02 per unit of volatility. If you would invest 3,536 in Nationwide Highmark Small on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Nationwide Highmark Small or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Schroders Smallmid vs. Nationwide Highmark Small
Performance |
| Timeline |
| Hartford Schroders |
| Nationwide Highmark Small |
Hartford Schroders and Nationwide Highmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Schroders and Nationwide Highmark
The main advantage of trading using opposite Hartford Schroders and Nationwide Highmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Schroders position performs unexpectedly, Nationwide Highmark 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 Nationwide Highmark will offset losses from the drop in Nationwide Highmark's long position.The idea behind Hartford Schroders Smallmid and Nationwide Highmark Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |