Correlation Between The Hartford and Hartford Small
Can any of the company-specific risk be diversified away by investing in both The Hartford 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 The Hartford and Hartford Small 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 Small Pany, you can compare the effects of market volatilities on The Hartford 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 The Hartford with a short position of Hartford Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Hartford Small.
Diversification Opportunities for The Hartford and Hartford Small
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Hartford is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Growth and Hartford Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small Pany 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 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 Pany has no effect on the direction of The Hartford i.e., The Hartford and Hartford Small go up and down completely randomly.
Pair Corralation between The Hartford and Hartford Small
Assuming the 90 days horizon The Hartford Growth is expected to generate 1.05 times more return on investment than Hartford Small. However, The Hartford is 1.05 times more volatile than Hartford Small Pany. It trades about 0.13 of its potential returns per unit of risk. Hartford Small Pany is currently generating about 0.1 per unit of risk. If you would invest 5,048 in The Hartford Growth on September 2, 2024 and sell it today you would earn a total of 2,415 from holding The Hartford Growth or generate 47.84% 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. Hartford Small Pany
Performance |
| Timeline |
| Hartford Growth |
| Hartford Small Pany |
The Hartford and Hartford Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Hartford Small
The main advantage of trading using opposite The Hartford and Hartford Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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.| The Hartford vs. The Hartford Dividend | The Hartford vs. The Hartford Capital | The Hartford vs. The Hartford Equity | The Hartford vs. The Hartford Midcap |
| Hartford Small vs. The Hartford Growth | Hartford Small vs. The Hartford Growth | Hartford Small vs. The Hartford Growth | Hartford Small 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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