Correlation Between Hartford Municipal and The Hartford
Can any of the company-specific risk be diversified away by investing in both Hartford Municipal and The Hartford 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 The Hartford 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 The Hartford Growth, you can compare the effects of market volatilities on Hartford Municipal and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Municipal and The Hartford.
Diversification Opportunities for Hartford Municipal and The Hartford
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hartford and The is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Municipal and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Hartford Municipal i.e., Hartford Municipal and The Hartford go up and down completely randomly.
Pair Corralation between Hartford Municipal and The Hartford
Assuming the 90 days horizon Hartford Municipal is expected to generate 7.65 times less return on investment than The Hartford. But when comparing it to its historical volatility, The Hartford Municipal is 7.02 times less risky than The Hartford. It trades about 0.12 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,426 in The Hartford Growth on August 29, 2024 and sell it today you would earn a total of 2,090 from holding The Hartford Growth or generate 47.22% 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. The Hartford Growth
Performance |
| Timeline |
| The Hartford Municipal |
| Hartford Growth |
Hartford Municipal and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Municipal and The Hartford
The main advantage of trading using opposite Hartford Municipal and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Municipal position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Hartford Municipal vs. The Hartford Growth | Hartford Municipal vs. The Hartford Growth | Hartford Municipal vs. The Hartford Growth | Hartford Municipal vs. The Hartford Growth |
| The Hartford vs. Virtus Seix Government | The Hartford vs. Vanguard Short Term Government | The Hartford vs. Inverse Government Long | The Hartford vs. Government Securities Fund |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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