Correlation Between The Hartford and Cutler Equity
Can any of the company-specific risk be diversified away by investing in both The Hartford and Cutler Equity 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 Cutler Equity 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 Cutler Equity, you can compare the effects of market volatilities on The Hartford and Cutler Equity 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 Cutler Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Cutler Equity.
Diversification Opportunities for The Hartford and Cutler Equity
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Cutler is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Equity and Cutler Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cutler Equity 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 Equity are associated (or correlated) with Cutler Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cutler Equity has no effect on the direction of The Hartford i.e., The Hartford and Cutler Equity go up and down completely randomly.
Pair Corralation between The Hartford and Cutler Equity
Assuming the 90 days horizon The Hartford is expected to generate 1.49 times less return on investment than Cutler Equity. In addition to that, The Hartford is 1.09 times more volatile than Cutler Equity. It trades about 0.07 of its total potential returns per unit of risk. Cutler Equity is currently generating about 0.11 per unit of volatility. If you would invest 2,237 in Cutler Equity on August 30, 2024 and sell it today you would earn a total of 697.00 from holding Cutler Equity or generate 31.16% 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 Equity vs. Cutler Equity
Performance |
| Timeline |
| Hartford Equity |
| Cutler Equity |
The Hartford and Cutler Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Cutler Equity
The main advantage of trading using opposite The Hartford and Cutler Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Cutler Equity 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 Cutler Equity will offset losses from the drop in Cutler Equity's long position.| The Hartford vs. The Hartford Dividend | The Hartford vs. The Hartford Total | The Hartford vs. The Hartford International | The Hartford vs. The Hartford Midcap |
| Cutler Equity vs. 1919 Financial Services | Cutler Equity vs. Mesirow Financial Small | Cutler Equity vs. Vanguard Financials Index | Cutler Equity vs. Gabelli Global Financial |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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