Correlation Between The Hartford and Strategic Income
Can any of the company-specific risk be diversified away by investing in both The Hartford and Strategic Income 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 Strategic Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Emerging and Strategic Income Fund, you can compare the effects of market volatilities on The Hartford and Strategic Income 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 Strategic Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Strategic Income.
Diversification Opportunities for The Hartford and Strategic Income
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between THE and Strategic is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Emerging and Strategic Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Income 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 Emerging are associated (or correlated) with Strategic Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Income has no effect on the direction of The Hartford i.e., The Hartford and Strategic Income go up and down completely randomly.
Pair Corralation between The Hartford and Strategic Income
Assuming the 90 days horizon The Hartford Emerging is expected to under-perform the Strategic Income. In addition to that, The Hartford is 1.8 times more volatile than Strategic Income Fund. It trades about -0.3 of its total potential returns per unit of risk. Strategic Income Fund is currently generating about -0.12 per unit of volatility. If you would invest 907.00 in Strategic Income Fund on September 3, 2024 and sell it today you would lose (10.00) from holding Strategic Income Fund or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Emerging vs. Strategic Income Fund
Performance |
| Timeline |
| Hartford Emerging |
| Strategic Income |
The Hartford and Strategic Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Strategic Income
The main advantage of trading using opposite The Hartford and Strategic Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Strategic Income 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 Strategic Income will offset losses from the drop in Strategic Income's long position.| The Hartford vs. HUMANA INC | The Hartford vs. Aquagold International | The Hartford vs. Barloworld Ltd ADR | The Hartford vs. Morningstar Unconstrained Allocation |
| Strategic Income vs. The Hartford Emerging | Strategic Income vs. Shelton Emerging Markets | Strategic Income vs. Morgan Stanley Emerging | Strategic Income vs. Locorr Market Trend |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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