Correlation Between Hartford Capital and Pax Balanced
Can any of the company-specific risk be diversified away by investing in both Hartford Capital and Pax Balanced 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 Capital and Pax Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Capital Appreciation and Pax Balanced Fund, you can compare the effects of market volatilities on Hartford Capital and Pax Balanced 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 Capital with a short position of Pax Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Capital and Pax Balanced.
Diversification Opportunities for Hartford Capital and Pax Balanced
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hartford and Pax is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Capital Appreciation and Pax Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax Balanced and Hartford Capital 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 Hartford Capital Appreciation are associated (or correlated) with Pax Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax Balanced has no effect on the direction of Hartford Capital i.e., Hartford Capital and Pax Balanced go up and down completely randomly.
Pair Corralation between Hartford Capital and Pax Balanced
Assuming the 90 days horizon Hartford Capital Appreciation is expected to generate 1.41 times more return on investment than Pax Balanced. However, Hartford Capital is 1.41 times more volatile than Pax Balanced Fund. It trades about 0.12 of its potential returns per unit of risk. Pax Balanced Fund is currently generating about 0.08 per unit of risk. If you would invest 4,013 in Hartford Capital Appreciation on August 30, 2024 and sell it today you would earn a total of 1,595 from holding Hartford Capital Appreciation or generate 39.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Capital Appreciation vs. Pax Balanced Fund
Performance |
| Timeline |
| Hartford Capital App |
| Pax Balanced |
Hartford Capital and Pax Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Capital and Pax Balanced
The main advantage of trading using opposite Hartford Capital and Pax Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Capital position performs unexpectedly, Pax Balanced 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 Pax Balanced will offset losses from the drop in Pax Balanced's long position.| Hartford Capital vs. Artisan High Income | Hartford Capital vs. Prudential High Yield | Hartford Capital vs. Siit High Yield | Hartford Capital vs. Gmo High Yield |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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