Correlation Between The Hartford and American Funds
Can any of the company-specific risk be diversified away by investing in both The Hartford and American Funds 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 American Funds 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 American Funds New, you can compare the effects of market volatilities on The Hartford and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and American Funds.
Diversification Opportunities for The Hartford and American Funds
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and American is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Small and American Funds New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds New 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 Small are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds New has no effect on the direction of The Hartford i.e., The Hartford and American Funds go up and down completely randomly.
Pair Corralation between The Hartford and American Funds
Assuming the 90 days horizon The Hartford is expected to generate 1.11 times less return on investment than American Funds. In addition to that, The Hartford is 1.33 times more volatile than American Funds New. It trades about 0.06 of its total potential returns per unit of risk. American Funds New is currently generating about 0.08 per unit of volatility. If you would invest 4,658 in American Funds New on September 4, 2024 and sell it today you would earn a total of 1,972 from holding American Funds New or generate 42.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
The Hartford Small vs. American Funds New
Performance |
| Timeline |
| Hartford Small |
| American Funds New |
The Hartford and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and American Funds
The main advantage of trading using opposite The Hartford and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. Hartford Growth Opportunities |
| American Funds vs. Dws Government Money | American Funds vs. Schwab Treasury Money | American Funds vs. Wells Fargo Funds | American Funds vs. Hsbc Treasury Money |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |