Correlation Between The Hartford and The Arbitrage
Can any of the company-specific risk be diversified away by investing in both The Hartford and The Arbitrage 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 The Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Growth and The Arbitrage Fund, you can compare the effects of market volatilities on The Hartford and The Arbitrage 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 The Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and The Arbitrage.
Diversification Opportunities for The Hartford and The Arbitrage
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and The is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Growth and The Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Arbitrage 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 Growth are associated (or correlated) with The Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Arbitrage has no effect on the direction of The Hartford i.e., The Hartford and The Arbitrage go up and down completely randomly.
Pair Corralation between The Hartford and The Arbitrage
Assuming the 90 days horizon The Hartford Growth is expected to generate 5.6 times more return on investment than The Arbitrage. However, The Hartford is 5.6 times more volatile than The Arbitrage Fund. It trades about 0.13 of its potential returns per unit of risk. The Arbitrage Fund is currently generating about 0.03 per unit of risk. If you would invest 4,040 in The Hartford Growth on September 4, 2024 and sell it today you would earn a total of 1,850 from holding The Hartford Growth or generate 45.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Growth vs. The Arbitrage Fund
Performance |
| Timeline |
| Hartford Growth |
| The Arbitrage |
The Hartford and The Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and The Arbitrage
The main advantage of trading using opposite The Hartford and The Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, The Arbitrage 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 The Arbitrage will offset losses from the drop in The Arbitrage's long position.| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
| The Arbitrage vs. Ftfa Franklin Templeton Growth | The Arbitrage vs. Chase Growth Fund | The Arbitrage vs. Qs Moderate Growth | The Arbitrage vs. L Abbett 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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