Correlation Between Hartford Growth and American Growth
Can any of the company-specific risk be diversified away by investing in both Hartford Growth and American Growth 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 Hartford Growth and American Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Growth Opportunities and American Growth Fund, you can compare the effects of market volatilities on Hartford Growth and American Growth 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 Hartford Growth with a short position of American Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Growth and American Growth.
Diversification Opportunities for Hartford Growth and American Growth
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hartford and American is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Growth Opportunities and American Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Growth and Hartford Growth 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 Hartford Growth Opportunities are associated (or correlated) with American Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Growth has no effect on the direction of Hartford Growth i.e., Hartford Growth and American Growth go up and down completely randomly.
Pair Corralation between Hartford Growth and American Growth
Assuming the 90 days horizon Hartford Growth Opportunities is expected to generate 1.13 times more return on investment than American Growth. However, Hartford Growth is 1.13 times more volatile than American Growth Fund. It trades about 0.11 of its potential returns per unit of risk. American Growth Fund is currently generating about 0.03 per unit of risk. If you would invest 4,060 in Hartford Growth Opportunities on November 2, 2024 and sell it today you would earn a total of 3,471 from holding Hartford Growth Opportunities or generate 85.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Growth Opportunities vs. American Growth Fund
Performance |
| Timeline |
| Hartford Growth Oppo |
| American Growth |
Hartford Growth and American Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Growth and American Growth
The main advantage of trading using opposite Hartford Growth and American Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Growth position performs unexpectedly, American Growth 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 American Growth will offset losses from the drop in American Growth's long position.| Hartford Growth vs. American Century High | Hartford Growth vs. Six Circles Credit | Hartford Growth vs. Dunham High Yield | Hartford Growth vs. Guggenheim High Yield |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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