Correlation Between The Hartford and Falcon Focus
Can any of the company-specific risk be diversified away by investing in both The Hartford and Falcon Focus 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 Falcon Focus 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 Falcon Focus Scv, you can compare the effects of market volatilities on The Hartford and Falcon Focus 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 Falcon Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Falcon Focus.
Diversification Opportunities for The Hartford and Falcon Focus
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between The and Falcon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Midcap and Falcon Focus Scv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Focus Scv 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 Falcon Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Focus Scv has no effect on the direction of The Hartford i.e., The Hartford and Falcon Focus go up and down completely randomly.
Pair Corralation between The Hartford and Falcon Focus
Assuming the 90 days horizon The Hartford is expected to generate 1.34 times less return on investment than Falcon Focus. In addition to that, The Hartford is 1.37 times more volatile than Falcon Focus Scv. It trades about 0.05 of its total potential returns per unit of risk. Falcon Focus Scv is currently generating about 0.1 per unit of volatility. If you would invest 1,018 in Falcon Focus Scv on August 31, 2024 and sell it today you would earn a total of 297.00 from holding Falcon Focus Scv or generate 29.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Midcap vs. Falcon Focus Scv
Performance |
| Timeline |
| Hartford Midcap |
| Falcon Focus Scv |
The Hartford and Falcon Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Falcon Focus
The main advantage of trading using opposite The Hartford and Falcon Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Falcon Focus 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 Falcon Focus will offset losses from the drop in Falcon Focus' long position.| The Hartford vs. Champlain Small | The Hartford vs. Heartland Value Plus | The Hartford vs. Jpmorgan Small Cap | The Hartford vs. Ab Small Cap |
| Falcon Focus vs. Vanguard Total Stock | Falcon Focus vs. Vanguard 500 Index | Falcon Focus vs. Vanguard Total Stock | Falcon Focus vs. Vanguard Total Stock |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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