Correlation Between Hartford Small and Omni Small-cap
Can any of the company-specific risk be diversified away by investing in both Hartford Small and Omni Small-cap 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 Small and Omni Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Small and Omni Small Cap Value, you can compare the effects of market volatilities on Hartford Small and Omni Small-cap 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 Small with a short position of Omni Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Small and Omni Small-cap.
Diversification Opportunities for Hartford Small and Omni Small-cap
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartford and Omni is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Small and Omni Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Small Cap and Hartford Small 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 Small are associated (or correlated) with Omni Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Small Cap has no effect on the direction of Hartford Small i.e., Hartford Small and Omni Small-cap go up and down completely randomly.
Pair Corralation between Hartford Small and Omni Small-cap
Assuming the 90 days horizon The Hartford Small is expected to generate 0.86 times more return on investment than Omni Small-cap. However, The Hartford Small is 1.16 times less risky than Omni Small-cap. It trades about 0.01 of its potential returns per unit of risk. Omni Small Cap Value is currently generating about -0.13 per unit of risk. If you would invest 3,105 in The Hartford Small on November 8, 2024 and sell it today you would lose (1.00) from holding The Hartford Small or give up 0.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Small vs. Omni Small Cap Value
Performance |
| Timeline |
| Hartford Small |
| Omni Small Cap |
Hartford Small and Omni Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Small and Omni Small-cap
The main advantage of trading using opposite Hartford Small and Omni Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Small position performs unexpectedly, Omni Small-cap 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 Omni Small-cap will offset losses from the drop in Omni Small-cap's long position.| Hartford Small vs. Great West Goldman Sachs | Hartford Small vs. Deutsche Gold Precious | Hartford Small vs. Europac Gold Fund | Hartford Small vs. Sprott Gold Equity |
| Omni Small-cap vs. Energy Services Fund | Omni Small-cap vs. Alpsalerian Energy Infrastructure | Omni Small-cap vs. Pimco Energy Tactical | Omni Small-cap vs. Gmo Resources |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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