Correlation Between The Hartford and Western Asset
Can any of the company-specific risk be diversified away by investing in both The Hartford and Western Asset 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 Western Asset 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 Western Asset Inflation, you can compare the effects of market volatilities on The Hartford and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Western Asset.
Diversification Opportunities for The Hartford and Western Asset
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Western is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Inflation and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Inflation has no effect on the direction of The Hartford i.e., The Hartford and Western Asset go up and down completely randomly.
Pair Corralation between The Hartford and Western Asset
Assuming the 90 days horizon The Hartford Inflation is expected to generate 0.81 times more return on investment than Western Asset. However, The Hartford Inflation is 1.24 times less risky than Western Asset. It trades about 0.06 of its potential returns per unit of risk. Western Asset Inflation is currently generating about 0.03 per unit of risk. If you would invest 918.00 in The Hartford Inflation on November 27, 2024 and sell it today you would earn a total of 92.00 from holding The Hartford Inflation or generate 10.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Inflation vs. Western Asset Inflation
Performance |
| Timeline |
| The Hartford Inflation |
| Western Asset Inflation |
The Hartford and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Western Asset
The main advantage of trading using opposite The Hartford and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| The Hartford vs. Baron Health Care | The Hartford vs. T Rowe Price | The Hartford vs. Hartford Healthcare Hls | The Hartford vs. The Gabelli Healthcare |
| Western Asset vs. Prudential High Yield | Western Asset vs. Pace High Yield | Western Asset vs. Gmo High Yield | Western Asset vs. Dunham High Yield |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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