Correlation Between The Hartford and Putnam U
Can any of the company-specific risk be diversified away by investing in both The Hartford and Putnam U 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 Putnam U 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 Putnam U S, you can compare the effects of market volatilities on The Hartford and Putnam U 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 Putnam U. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Putnam U.
Diversification Opportunities for The Hartford and Putnam U
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between The and Putnam is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Equity and Putnam U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam U S 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 Putnam U. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam U S has no effect on the direction of The Hartford i.e., The Hartford and Putnam U go up and down completely randomly.
Pair Corralation between The Hartford and Putnam U
Assuming the 90 days horizon The Hartford Equity is expected to generate 1.53 times more return on investment than Putnam U. However, The Hartford is 1.53 times more volatile than Putnam U S. It trades about 0.12 of its potential returns per unit of risk. Putnam U S is currently generating about 0.08 per unit of risk. If you would invest 1,901 in The Hartford Equity on September 4, 2024 and sell it today you would earn a total of 396.00 from holding The Hartford Equity or generate 20.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
The Hartford Equity vs. Putnam U S
Performance |
| Timeline |
| Hartford Equity |
| Putnam U S |
The Hartford and Putnam U Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Putnam U
The main advantage of trading using opposite The Hartford and Putnam U positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Putnam U 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 Putnam U will offset losses from the drop in Putnam U'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 |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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