Correlation Between The Hartford and Short Duration
Can any of the company-specific risk be diversified away by investing in both The Hartford and Short Duration 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 Short Duration 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 Short Duration Inflation, you can compare the effects of market volatilities on The Hartford and Short Duration 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 Short Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Short Duration.
Diversification Opportunities for The Hartford and Short Duration
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and Short is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Municipal and Short Duration Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Duration Inflation 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 Municipal are associated (or correlated) with Short Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Duration Inflation has no effect on the direction of The Hartford i.e., The Hartford and Short Duration go up and down completely randomly.
Pair Corralation between The Hartford and Short Duration
Assuming the 90 days horizon The Hartford Municipal is expected to generate 0.96 times more return on investment than Short Duration. However, The Hartford Municipal is 1.05 times less risky than Short Duration. It trades about 0.08 of its potential returns per unit of risk. Short Duration Inflation is currently generating about 0.07 per unit of risk. If you would invest 774.00 in The Hartford Municipal on August 29, 2024 and sell it today you would earn a total of 65.00 from holding The Hartford Municipal or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Municipal vs. Short Duration Inflation
Performance |
| Timeline |
| The Hartford Municipal |
| Short Duration Inflation |
The Hartford and Short Duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Short Duration
The main advantage of trading using opposite The Hartford and Short Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Short Duration 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 Short Duration will offset losses from the drop in Short Duration's long position.| The Hartford vs. Vanguard Intermediate Term Tax Exempt | The Hartford vs. Vanguard Intermediate Term Tax Exempt | The Hartford vs. Tax Exempt Bond | The Hartford vs. Tax Exempt Bond |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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