Correlation Between Hartford Emerging and American Funds
Can any of the company-specific risk be diversified away by investing in both Hartford Emerging and American Funds 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 Emerging and American Funds 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 American Funds Fundamental, you can compare the effects of market volatilities on Hartford Emerging and American Funds 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 Emerging with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Emerging and American Funds.
Diversification Opportunities for Hartford Emerging and American Funds
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hartford and American is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Emerging and American Funds Fundamental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Funda and Hartford Emerging 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Funda has no effect on the direction of Hartford Emerging i.e., Hartford Emerging and American Funds go up and down completely randomly.
Pair Corralation between Hartford Emerging and American Funds
Assuming the 90 days horizon Hartford Emerging is expected to generate 14.37 times less return on investment than American Funds. But when comparing it to its historical volatility, The Hartford Emerging is 1.85 times less risky than American Funds. It trades about 0.01 of its potential returns per unit of risk. American Funds Fundamental is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,538 in American Funds Fundamental on September 12, 2024 and sell it today you would earn a total of 2,305 from holding American Funds Fundamental or generate 35.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Emerging vs. American Funds Fundamental
Performance |
| Timeline |
| Hartford Emerging |
| American Funds Funda |
Hartford Emerging and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Emerging and American Funds
The main advantage of trading using opposite Hartford Emerging and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Emerging position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Hartford Emerging vs. Fpa Queens Road | Hartford Emerging vs. Ab Small Cap | Hartford Emerging vs. Omni Small Cap Value | Hartford Emerging vs. Boston Partners Small |
| American Funds vs. American Independence Kansas | American Funds vs. American Funds 2055 | American Funds vs. American Beacon Large | American Funds vs. American Beacon Ark |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |