Correlation Between The Hartford and Steward International
Can any of the company-specific risk be diversified away by investing in both The Hartford and Steward International 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 Steward International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Global and Steward International Enhanced, you can compare the effects of market volatilities on The Hartford and Steward International 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 Steward International. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Steward International.
Diversification Opportunities for The Hartford and Steward International
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Steward is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Global and Steward International Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward International 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 Global are associated (or correlated) with Steward International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward International has no effect on the direction of The Hartford i.e., The Hartford and Steward International go up and down completely randomly.
Pair Corralation between The Hartford and Steward International
Assuming the 90 days horizon The Hartford Global is expected to under-perform the Steward International. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Hartford Global is 1.85 times less risky than Steward International. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Steward International Enhanced is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,042 in Steward International Enhanced on August 29, 2024 and sell it today you would earn a total of 36.00 from holding Steward International Enhanced or generate 1.76% 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 Global vs. Steward International Enhanced
Performance |
| Timeline |
| Hartford Global |
| Steward International |
The Hartford and Steward International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Steward International
The main advantage of trading using opposite The Hartford and Steward International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Steward International 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 Steward International will offset losses from the drop in Steward International's long position.| The Hartford vs. Capital Income Builder | The Hartford vs. Capital Income Builder | The Hartford vs. Capital Income Builder | The Hartford vs. HUMANA INC |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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