Correlation Between The Hartford and Swan Defined
Can any of the company-specific risk be diversified away by investing in both The Hartford and Swan Defined 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 Swan Defined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Inflation and Swan Defined Risk, you can compare the effects of market volatilities on The Hartford and Swan Defined 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 Swan Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Swan Defined.
Diversification Opportunities for The Hartford and Swan Defined
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between The and Swan is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Inflation and Swan Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Defined Risk 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 Inflation are associated (or correlated) with Swan Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Defined Risk has no effect on the direction of The Hartford i.e., The Hartford and Swan Defined go up and down completely randomly.
Pair Corralation between The Hartford and Swan Defined
Assuming the 90 days horizon The Hartford is expected to generate 7.28 times less return on investment than Swan Defined. But when comparing it to its historical volatility, The Hartford Inflation is 3.65 times less risky than Swan Defined. It trades about 0.14 of its potential returns per unit of risk. Swan Defined Risk is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,381 in Swan Defined Risk on September 2, 2024 and sell it today you would earn a total of 51.00 from holding Swan Defined Risk or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Inflation vs. Swan Defined Risk
Performance |
| Timeline |
| The Hartford Inflation |
| Swan Defined Risk |
The Hartford and Swan Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Swan Defined
The main advantage of trading using opposite The Hartford and Swan Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Swan Defined 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 Swan Defined will offset losses from the drop in Swan Defined's long position.| The Hartford vs. Hartford Growth Opportunities | The Hartford vs. The Hartford Growth | The Hartford vs. Hartford Global Impact | The Hartford vs. Hartford Global Impact |
| Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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