Correlation Between Hartford Municipal and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both Hartford Municipal and Amer Beacon 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 Municipal and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Municipal and Amer Beacon Ark, you can compare the effects of market volatilities on Hartford Municipal and Amer Beacon 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 Municipal with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Municipal and Amer Beacon.
Diversification Opportunities for Hartford Municipal and Amer Beacon
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hartford and Amer is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Municipal and Amer Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Ark and Hartford Municipal 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 Municipal are associated (or correlated) with Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Ark has no effect on the direction of Hartford Municipal i.e., Hartford Municipal and Amer Beacon go up and down completely randomly.
Pair Corralation between Hartford Municipal and Amer Beacon
Assuming the 90 days horizon The Hartford Municipal is expected to generate 0.07 times more return on investment than Amer Beacon. However, The Hartford Municipal is 14.1 times less risky than Amer Beacon. It trades about 0.26 of its potential returns per unit of risk. Amer Beacon Ark is currently generating about -0.14 per unit of risk. If you would invest 831.00 in The Hartford Municipal on November 28, 2024 and sell it today you would earn a total of 8.00 from holding The Hartford Municipal or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Municipal vs. Amer Beacon Ark
Performance |
| Timeline |
| The Hartford Municipal |
| Amer Beacon Ark |
Hartford Municipal and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Municipal and Amer Beacon
The main advantage of trading using opposite Hartford Municipal and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Municipal position performs unexpectedly, Amer Beacon 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 Amer Beacon will offset losses from the drop in Amer Beacon's long position.| Hartford Municipal vs. Teton Vertible Securities | Hartford Municipal vs. Lord Abbett Vertible | Hartford Municipal vs. Virtus Convertible | Hartford Municipal vs. Franklin Vertible Securities |
| Amer Beacon vs. Rbc Emerging Markets | Amer Beacon vs. Mondrian Emerging Markets | Amer Beacon vs. Goldman Sachs Emerging | Amer Beacon vs. Investec Emerging Markets |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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