Correlation Between Hartford Municipal and Hartford Core
Can any of the company-specific risk be diversified away by investing in both Hartford Municipal and Hartford Core 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 Hartford Core 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 Hartford E Equity, you can compare the effects of market volatilities on Hartford Municipal and Hartford Core 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 Hartford Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Municipal and Hartford Core.
Diversification Opportunities for Hartford Municipal and Hartford Core
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hartford and Hartford is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Municipal and Hartford E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford E Equity 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 Hartford Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford E Equity has no effect on the direction of Hartford Municipal i.e., Hartford Municipal and Hartford Core go up and down completely randomly.
Pair Corralation between Hartford Municipal and Hartford Core
Assuming the 90 days horizon Hartford Municipal is expected to generate 4.58 times less return on investment than Hartford Core. But when comparing it to its historical volatility, The Hartford Municipal is 3.88 times less risky than Hartford Core. It trades about 0.1 of its potential returns per unit of risk. Hartford E Equity is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,183 in Hartford E Equity on August 31, 2024 and sell it today you would earn a total of 1,613 from holding Hartford E Equity or generate 38.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Municipal vs. Hartford E Equity
Performance |
| Timeline |
| The Hartford Municipal |
| Hartford E Equity |
Hartford Municipal and Hartford Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Municipal and Hartford Core
The main advantage of trading using opposite Hartford Municipal and Hartford Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Municipal position performs unexpectedly, Hartford Core 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 Core will offset losses from the drop in Hartford Core's long position.The idea behind The Hartford Municipal and Hartford E Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Hartford Core vs. The Hartford Dividend | Hartford Core vs. The Hartford Midcap | Hartford Core vs. The Hartford Balanced | Hartford Core vs. The Hartford International |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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