Correlation Between The Hartford and Mairs Power
Can any of the company-specific risk be diversified away by investing in both The Hartford and Mairs Power 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 Mairs Power 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 Mairs Power Growth, you can compare the effects of market volatilities on The Hartford and Mairs Power 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 Mairs Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Mairs Power.
Diversification Opportunities for The Hartford and Mairs Power
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and Mairs is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Midcap and Mairs Power Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mairs Power Growth 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 Midcap are associated (or correlated) with Mairs Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mairs Power Growth has no effect on the direction of The Hartford i.e., The Hartford and Mairs Power go up and down completely randomly.
Pair Corralation between The Hartford and Mairs Power
Assuming the 90 days horizon The Hartford is expected to generate 1.22 times less return on investment than Mairs Power. In addition to that, The Hartford is 1.3 times more volatile than Mairs Power Growth. It trades about 0.11 of its total potential returns per unit of risk. Mairs Power Growth is currently generating about 0.17 per unit of volatility. If you would invest 12,629 in Mairs Power Growth on August 26, 2024 and sell it today you would earn a total of 5,389 from holding Mairs Power Growth or generate 42.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Midcap vs. Mairs Power Growth
Performance |
| Timeline |
| Hartford Midcap |
| Mairs Power Growth |
The Hartford and Mairs Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Mairs Power
The main advantage of trading using opposite The Hartford and Mairs Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Mairs Power 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 Mairs Power will offset losses from the drop in Mairs Power's long position.| The Hartford vs. Europacific Growth Fund | The Hartford vs. Washington Mutual Investors | The Hartford vs. Wells Fargo Special | The Hartford vs. Mfs Emerging Markets |
| Mairs Power vs. Meridian Trarian Fund | Mairs Power vs. Mairs Power Balanced | Mairs Power vs. Clipper Fund Inc | Mairs Power vs. Meridian Growth Fund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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