Correlation Between The Hartford and Hartford Midcap
Can any of the company-specific risk be diversified away by investing in both The Hartford and Hartford Midcap 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 Midcap 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 Hartford Midcap, you can compare the effects of market volatilities on The Hartford and Hartford Midcap 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 Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Hartford Midcap.
Diversification Opportunities for The Hartford and Hartford Midcap
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Hartford is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Growth and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap 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 Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Midcap has no effect on the direction of The Hartford i.e., The Hartford and Hartford Midcap go up and down completely randomly.
Pair Corralation between The Hartford and Hartford Midcap
Assuming the 90 days horizon The Hartford is expected to generate 2.19 times less return on investment than Hartford Midcap. In addition to that, The Hartford is 1.09 times more volatile than The Hartford Midcap. It trades about 0.16 of its total potential returns per unit of risk. The Hartford Midcap is currently generating about 0.37 per unit of volatility. If you would invest 2,658 in The Hartford Midcap on August 28, 2024 and sell it today you would earn a total of 233.00 from holding The Hartford Midcap or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Growth vs. The Hartford Midcap
Performance |
| Timeline |
| Hartford Growth |
| Hartford Midcap |
The Hartford and Hartford Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Hartford Midcap
The main advantage of trading using opposite The Hartford and Hartford Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Hartford Midcap 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 Midcap will offset losses from the drop in Hartford Midcap's long position.| The Hartford vs. Precious Metals And | The Hartford vs. Great West Goldman Sachs | The Hartford vs. Europac Gold Fund | The Hartford vs. Gabelli Gold Fund |
| Hartford Midcap vs. Scharf Global Opportunity | Hartford Midcap vs. Mirova Global Green | Hartford Midcap vs. Barings Global Floating | Hartford Midcap vs. Artisan Global Unconstrained |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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