Correlation Between Hartford Disciplined and Hartford Small

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Can any of the company-specific risk be diversified away by investing in both Hartford Disciplined and Hartford Small 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 Disciplined and Hartford Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Disciplined Equity and The Hartford Small, you can compare the effects of market volatilities on Hartford Disciplined and Hartford Small 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 Disciplined with a short position of Hartford Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Disciplined and Hartford Small.

Diversification Opportunities for Hartford Disciplined and Hartford Small

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Hartford and Hartford is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Disciplined Equity and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small and Hartford Disciplined 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 Disciplined Equity are associated (or correlated) with Hartford Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small has no effect on the direction of Hartford Disciplined i.e., Hartford Disciplined and Hartford Small go up and down completely randomly.

Pair Corralation between Hartford Disciplined and Hartford Small

Assuming the 90 days horizon Hartford Disciplined Equity is expected to generate 0.67 times more return on investment than Hartford Small. However, Hartford Disciplined Equity is 1.49 times less risky than Hartford Small. It trades about 0.09 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.06 per unit of risk. If you would invest  1,610  in Hartford Disciplined Equity on August 29, 2024 and sell it today you would earn a total of  714.00  from holding Hartford Disciplined Equity or generate 44.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Hartford Disciplined Equity  vs.  The Hartford Small

 Performance 
       Timeline  
Hartford Disciplined 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Disciplined Equity are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Hartford Disciplined may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Hartford Small 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Small are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hartford Small may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Hartford Disciplined and Hartford Small Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hartford Disciplined and Hartford Small

The main advantage of trading using opposite Hartford Disciplined and Hartford Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Disciplined position performs unexpectedly, Hartford Small 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 Small will offset losses from the drop in Hartford Small's long position.
The idea behind Hartford Disciplined Equity and The Hartford Small 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.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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