Correlation Between The Hartford and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both The Hartford and Needham Aggressive 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 Needham Aggressive 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 Needham Aggressive Growth, you can compare the effects of market volatilities on The Hartford and Needham Aggressive 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 Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Needham Aggressive.
Diversification Opportunities for The Hartford and Needham Aggressive
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and Needham is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Midcap and Needham Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Aggressive 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 Needham Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Aggressive Growth has no effect on the direction of The Hartford i.e., The Hartford and Needham Aggressive go up and down completely randomly.
Pair Corralation between The Hartford and Needham Aggressive
Assuming the 90 days horizon The Hartford Midcap is expected to generate 0.67 times more return on investment than Needham Aggressive. However, The Hartford Midcap is 1.5 times less risky than Needham Aggressive. It trades about 0.23 of its potential returns per unit of risk. Needham Aggressive Growth is currently generating about 0.1 per unit of risk. If you would invest 2,705 in The Hartford Midcap on September 2, 2024 and sell it today you would earn a total of 371.00 from holding The Hartford Midcap or generate 13.72% 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. Needham Aggressive Growth
Performance |
| Timeline |
| Hartford Midcap |
| Needham Aggressive Growth |
The Hartford and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Needham Aggressive
The main advantage of trading using opposite The Hartford and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Needham Aggressive 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 Needham Aggressive will offset losses from the drop in Needham Aggressive'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 |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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