Correlation Between The Hartford and Mid Cap
Can any of the company-specific risk be diversified away by investing in both The Hartford and Mid Cap 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 Mid Cap 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 Mid Cap Growth, you can compare the effects of market volatilities on The Hartford and Mid Cap 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 Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Mid Cap.
Diversification Opportunities for The Hartford and Mid Cap
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and Mid is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Growth and Mid Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap 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 Growth are associated (or correlated) with Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Growth has no effect on the direction of The Hartford i.e., The Hartford and Mid Cap go up and down completely randomly.
Pair Corralation between The Hartford and Mid Cap
Assuming the 90 days horizon The Hartford Growth is expected to generate 0.98 times more return on investment than Mid Cap. However, The Hartford Growth is 1.02 times less risky than Mid Cap. It trades about -0.03 of its potential returns per unit of risk. Mid Cap Growth is currently generating about -0.15 per unit of risk. If you would invest 6,887 in The Hartford Growth on October 12, 2024 and sell it today you would lose (64.00) from holding The Hartford Growth or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Growth vs. Mid Cap Growth
Performance |
| Timeline |
| Hartford Growth |
| Mid Cap Growth |
The Hartford and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Mid Cap
The main advantage of trading using opposite The Hartford and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Mid Cap 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 Mid Cap will offset losses from the drop in Mid Cap's long position.| The Hartford vs. Alger Health Sciences | The Hartford vs. Invesco Global Health | The Hartford vs. Alphacentric Lifesci Healthcare | The Hartford vs. Delaware Healthcare Fund |
| Mid Cap vs. Touchstone Sustainability And | Mid Cap vs. Growth Opportunities Fund | Mid Cap vs. Total Return Fund | Mid Cap vs. William Blair International |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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