Correlation Between The Hartford and Hartford Moderate
Can any of the company-specific risk be diversified away by investing in both The Hartford and Hartford Moderate 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 Hartford Moderate 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 Hartford Moderate Allocation, you can compare the effects of market volatilities on The Hartford and Hartford Moderate 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 Hartford Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Hartford Moderate.
Diversification Opportunities for The Hartford and Hartford Moderate
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and Hartford is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Growth and Hartford Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Moderate 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 Hartford Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Moderate has no effect on the direction of The Hartford i.e., The Hartford and Hartford Moderate go up and down completely randomly.
Pair Corralation between The Hartford and Hartford Moderate
Assuming the 90 days horizon The Hartford Growth is expected to generate 2.44 times more return on investment than Hartford Moderate. However, The Hartford is 2.44 times more volatile than Hartford Moderate Allocation. It trades about 0.35 of its potential returns per unit of risk. Hartford Moderate Allocation is currently generating about 0.37 per unit of risk. If you would invest 5,379 in The Hartford Growth on September 1, 2024 and sell it today you would earn a total of 392.00 from holding The Hartford Growth or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Hartford Growth vs. Hartford Moderate Allocation
Performance |
| Timeline |
| Hartford Growth |
| Hartford Moderate |
The Hartford and Hartford Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Hartford Moderate
The main advantage of trading using opposite The Hartford and Hartford Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Hartford Moderate 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 Hartford Moderate will offset losses from the drop in Hartford Moderate's long position.| The Hartford vs. Allianzgi Convertible Income | The Hartford vs. The Gamco Global | The Hartford vs. Fidelity Sai Convertible | The Hartford vs. Lord Abbett Convertible |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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