Correlation Between Hartford Equity and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both Hartford Equity and Mainstay Balanced 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 Mainstay Balanced 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 Mainstay Balanced Fund, you can compare the effects of market volatilities on Hartford Equity and Mainstay Balanced 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 Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Equity and Mainstay Balanced.
Diversification Opportunities for Hartford Equity and Mainstay Balanced
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hartford and Mainstay is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Equity and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced 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 Mainstay Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Balanced has no effect on the direction of Hartford Equity i.e., Hartford Equity and Mainstay Balanced go up and down completely randomly.
Pair Corralation between Hartford Equity and Mainstay Balanced
Assuming the 90 days horizon The Hartford Equity is expected to generate 0.88 times more return on investment than Mainstay Balanced. However, The Hartford Equity is 1.13 times less risky than Mainstay Balanced. It trades about 0.1 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about -0.03 per unit of risk. If you would invest 2,161 in The Hartford Equity on September 12, 2024 and sell it today you would earn a total of 79.00 from holding The Hartford Equity or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Equity vs. Mainstay Balanced Fund
Performance |
| Timeline |
| Hartford Equity |
| Mainstay Balanced |
Hartford Equity and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Equity and Mainstay Balanced
The main advantage of trading using opposite Hartford Equity and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Equity position performs unexpectedly, Mainstay Balanced 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 Mainstay Balanced will offset losses from the drop in Mainstay Balanced'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 |
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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 Directory module to find actively traded commodities issued by global exchanges.
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