Correlation Between Hartford Midcap and Hartford Equity
Can any of the company-specific risk be diversified away by investing in both Hartford Midcap and Hartford Equity 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 Midcap and Hartford Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Midcap and The Hartford Equity, you can compare the effects of market volatilities on Hartford Midcap and Hartford Equity 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 Midcap with a short position of Hartford Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Midcap and Hartford Equity.
Diversification Opportunities for Hartford Midcap and Hartford Equity
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hartford and Hartford is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Midcap and The Hartford Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Equity and Hartford Midcap 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 Midcap are associated (or correlated) with Hartford Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Equity has no effect on the direction of Hartford Midcap i.e., Hartford Midcap and Hartford Equity go up and down completely randomly.
Pair Corralation between Hartford Midcap and Hartford Equity
Assuming the 90 days horizon The Hartford Midcap is expected to under-perform the Hartford Equity. In addition to that, Hartford Midcap is 3.18 times more volatile than The Hartford Equity. It trades about -0.12 of its total potential returns per unit of risk. The Hartford Equity is currently generating about -0.13 per unit of volatility. If you would invest 2,259 in The Hartford Equity on September 13, 2024 and sell it today you would lose (29.00) from holding The Hartford Equity or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Midcap vs. The Hartford Equity
Performance |
| Timeline |
| Hartford Midcap |
| Hartford Equity |
Hartford Midcap and Hartford Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Midcap and Hartford Equity
The main advantage of trading using opposite Hartford Midcap and Hartford Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Midcap position performs unexpectedly, Hartford Equity 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 Equity will offset losses from the drop in Hartford Equity's long position.| Hartford Midcap vs. Old Westbury Municipal | Hartford Midcap vs. Ishares Municipal Bond | Hartford Midcap vs. Transamerica Intermediate Muni | Hartford Midcap vs. Oklahoma Municipal Fund |
| Hartford Equity vs. The Hartford Dividend | Hartford Equity vs. The Hartford Total | Hartford Equity vs. The Hartford International | Hartford Equity vs. The Hartford Midcap |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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