Correlation Between The Hartford and Hartford Equity
Can any of the company-specific risk be diversified away by investing in both The Hartford and Hartford Equity 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 Equity 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 Equity, you can compare the effects of market volatilities on The Hartford and Hartford Equity 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 Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Hartford Equity.
Diversification Opportunities for The Hartford and Hartford Equity
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 Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Equity 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 Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Equity has no effect on the direction of The Hartford i.e., The Hartford and Hartford Equity go up and down completely randomly.
Pair Corralation between The Hartford and Hartford Equity
Assuming the 90 days horizon The Hartford Growth is expected to generate 1.98 times more return on investment than Hartford Equity. However, The Hartford is 1.98 times more volatile than The Hartford Equity. It trades about 0.09 of its potential returns per unit of risk. The Hartford Equity is currently generating about 0.13 per unit of risk. If you would invest 5,358 in The Hartford Growth on September 1, 2024 and sell it today you would earn a total of 1,170 from holding The Hartford Growth or generate 21.84% 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 Equity
Performance |
| Timeline |
| Hartford Growth |
| Hartford Equity |
The Hartford and Hartford Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Hartford Equity
The main advantage of trading using opposite The Hartford and Hartford Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Hartford Equity 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 Equity will offset losses from the drop in Hartford Equity's long position.| The Hartford vs. Baron Health Care | The Hartford vs. Alger Health Sciences | The Hartford vs. Tekla Healthcare Opportunities | The Hartford vs. Allianzgi Health Sciences |
| Hartford Equity vs. The Hartford Growth | Hartford Equity vs. The Hartford Growth | Hartford Equity vs. The Hartford Growth | Hartford Equity vs. The Hartford 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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