Correlation Between The Hartford and Touchstone Dividend
Can any of the company-specific risk be diversified away by investing in both The Hartford and Touchstone Dividend 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 Touchstone Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Floating and Touchstone Dividend Equity, you can compare the effects of market volatilities on The Hartford and Touchstone Dividend 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 Touchstone Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Touchstone Dividend.
Diversification Opportunities for The Hartford and Touchstone Dividend
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and Touchstone is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Floating and Touchstone Dividend Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Dividend 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 Floating are associated (or correlated) with Touchstone Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Dividend has no effect on the direction of The Hartford i.e., The Hartford and Touchstone Dividend go up and down completely randomly.
Pair Corralation between The Hartford and Touchstone Dividend
Assuming the 90 days horizon The Hartford is expected to generate 14.35 times less return on investment than Touchstone Dividend. But when comparing it to its historical volatility, The Hartford Floating is 9.8 times less risky than Touchstone Dividend. It trades about 0.18 of its potential returns per unit of risk. Touchstone Dividend Equity is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,927 in Touchstone Dividend Equity on September 1, 2024 and sell it today you would earn a total of 74.00 from holding Touchstone Dividend Equity or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Hartford Floating vs. Touchstone Dividend Equity
Performance |
| Timeline |
| Hartford Floating |
| Touchstone Dividend |
The Hartford and Touchstone Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Touchstone Dividend
The main advantage of trading using opposite The Hartford and Touchstone Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Touchstone Dividend 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 Touchstone Dividend will offset losses from the drop in Touchstone Dividend's long position.| The Hartford vs. Lord Abbett Diversified | The Hartford vs. Small Cap Stock | The Hartford vs. Oppenheimer International Diversified | The Hartford vs. Adams Diversified Equity |
| Touchstone Dividend vs. Touchstone Small Cap | Touchstone Dividend vs. Touchstone Sands Capital | Touchstone Dividend vs. Mid Cap Growth | Touchstone Dividend vs. Mid Cap Growth |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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