Correlation Between The Hartford and Global Stock
Can any of the company-specific risk be diversified away by investing in both The Hartford and Global Stock 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 Global Stock 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 Global Stock Fund, you can compare the effects of market volatilities on The Hartford and Global Stock 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 Global Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Global Stock.
Diversification Opportunities for The Hartford and Global Stock
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and Global is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Equity and Global Stock Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Stock 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 Global Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Stock has no effect on the direction of The Hartford i.e., The Hartford and Global Stock go up and down completely randomly.
Pair Corralation between The Hartford and Global Stock
Assuming the 90 days horizon The Hartford Equity is expected to generate 0.54 times more return on investment than Global Stock. However, The Hartford Equity is 1.84 times less risky than Global Stock. It trades about 0.12 of its potential returns per unit of risk. Global Stock Fund is currently generating about 0.01 per unit of risk. If you would invest 1,911 in The Hartford Equity on September 4, 2024 and sell it today you would earn a total of 384.00 from holding The Hartford Equity or generate 20.09% 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. Global Stock Fund
Performance |
| Timeline |
| Hartford Equity |
| Global Stock |
The Hartford and Global Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Global Stock
The main advantage of trading using opposite The Hartford and Global Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Global Stock 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 Global Stock will offset losses from the drop in Global Stock's long position.| The Hartford vs. Invesco Developing Markets | The Hartford vs. Delaware Diversified Income | The Hartford vs. Mfs Growth Fund | The Hartford vs. The Hartford Balanced |
| Global Stock vs. International Stock Fund | Global Stock vs. Global Stock Fund | Global Stock vs. Global Stock Fund | Global Stock vs. Virtus Kar Small 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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