Correlation Between Hartford Equity and Cullen Emerging
Can any of the company-specific risk be diversified away by investing in both Hartford Equity and Cullen Emerging 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 Equity and Cullen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Equity and Cullen Emerging Markets, you can compare the effects of market volatilities on Hartford Equity and Cullen Emerging 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 Equity with a short position of Cullen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Equity and Cullen Emerging.
Diversification Opportunities for Hartford Equity and Cullen Emerging
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hartford and Cullen is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Equity and Cullen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Emerging Markets and Hartford Equity 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 Equity are associated (or correlated) with Cullen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Emerging Markets has no effect on the direction of Hartford Equity i.e., Hartford Equity and Cullen Emerging go up and down completely randomly.
Pair Corralation between Hartford Equity and Cullen Emerging
Assuming the 90 days horizon The Hartford Equity is expected to under-perform the Cullen Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Hartford Equity is 1.22 times less risky than Cullen Emerging. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Cullen Emerging Markets is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,259 in Cullen Emerging Markets on September 12, 2024 and sell it today you would lose (3.00) from holding Cullen Emerging Markets or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Hartford Equity vs. Cullen Emerging Markets
Performance |
| Timeline |
| Hartford Equity |
| Cullen Emerging Markets |
Hartford Equity and Cullen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Equity and Cullen Emerging
The main advantage of trading using opposite Hartford Equity and Cullen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Equity position performs unexpectedly, Cullen Emerging 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 Cullen Emerging will offset losses from the drop in Cullen Emerging's long position.| Hartford Equity vs. The Hartford Dividend | Hartford Equity vs. The Hartford Total | Hartford Equity vs. The Hartford International | Hartford Equity vs. The Hartford Midcap |
| Cullen Emerging vs. Touchstone Large Cap | Cullen Emerging vs. Fidelity Series 1000 | Cullen Emerging vs. Lord Abbett Affiliated | Cullen Emerging vs. Transamerica Large Cap |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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