Correlation Between The Hartford and Large Cap
Can any of the company-specific risk be diversified away by investing in both The Hartford and Large Cap 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 Large Cap 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 Large Cap Value, you can compare the effects of market volatilities on The Hartford and Large Cap 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 Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Large Cap.
Diversification Opportunities for The Hartford and Large Cap
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between THE and Large is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Inflation and Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value 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 Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of The Hartford i.e., The Hartford and Large Cap go up and down completely randomly.
Pair Corralation between The Hartford and Large Cap
Assuming the 90 days horizon The Hartford is expected to generate 11.82 times less return on investment than Large Cap. But when comparing it to its historical volatility, The Hartford Inflation is 5.39 times less risky than Large Cap. It trades about 0.03 of its potential returns per unit of risk. Large Cap Value is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,840 in Large Cap Value on August 29, 2024 and sell it today you would earn a total of 32.00 from holding Large Cap Value or generate 1.13% 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. Large Cap Value
Performance |
| Timeline |
| The Hartford Inflation |
| Large Cap Value |
The Hartford and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Large Cap
The main advantage of trading using opposite The Hartford and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap's long position.| The Hartford vs. Vanguard Inflation Protected Securities | The Hartford vs. American Funds Inflation | The Hartford vs. HUMANA INC | The Hartford vs. Aquagold International |
| Large Cap vs. Ab Municipal Bond | Large Cap vs. Ab Bond Inflation | Large Cap vs. The Hartford Inflation | Large Cap vs. Lord Abbett Inflation |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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