Correlation Between Hartford Growth and Hartford Small
Can any of the company-specific risk be diversified away by investing in both Hartford Growth and Hartford Small 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 Hartford Small 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 The Hartford Small, you can compare the effects of market volatilities on Hartford Growth and Hartford Small 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 Hartford Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Growth and Hartford Small.
Diversification Opportunities for Hartford Growth and Hartford Small
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hartford and Hartford is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Growth Opportunities and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small 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 Hartford Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small has no effect on the direction of Hartford Growth i.e., Hartford Growth and Hartford Small go up and down completely randomly.
Pair Corralation between Hartford Growth and Hartford Small
Assuming the 90 days horizon Hartford Growth is expected to generate 1.4 times less return on investment than Hartford Small. But when comparing it to its historical volatility, Hartford Growth Opportunities is 1.46 times less risky than Hartford Small. It trades about 0.32 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,234 in The Hartford Small on September 2, 2024 and sell it today you would earn a total of 206.00 from holding The Hartford Small or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Growth Opportunities vs. The Hartford Small
Performance |
| Timeline |
| Hartford Growth Oppo |
| Hartford Small |
Hartford Growth and Hartford Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Growth and Hartford Small
The main advantage of trading using opposite Hartford Growth and Hartford Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Growth position performs unexpectedly, Hartford Small 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 Small will offset losses from the drop in Hartford Small's long position.| Hartford Growth vs. Allianzgi Health Sciences | Hartford Growth vs. Invesco Global Health | Hartford Growth vs. Health Biotchnology Portfolio | Hartford Growth vs. Baillie Gifford Health |
| Hartford Small vs. Ab Small Cap | Hartford Small vs. Chartwell Small Cap | Hartford Small vs. Baird Smallmid Cap | Hartford Small vs. Kinetics Small Cap |
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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