Correlation Between The Hartford and High Yield
Can any of the company-specific risk be diversified away by investing in both The Hartford and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on The Hartford and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and High Yield.
Diversification Opportunities for The Hartford and High Yield
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between The and High is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Small and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of The Hartford i.e., The Hartford and High Yield go up and down completely randomly.
Pair Corralation between The Hartford and High Yield
Assuming the 90 days horizon The Hartford Small is expected to generate 8.86 times more return on investment than High Yield. However, The Hartford is 8.86 times more volatile than High Yield Fund. It trades about 0.29 of its potential returns per unit of risk. High Yield Fund is currently generating about 0.08 per unit of risk. If you would invest 2,903 in The Hartford Small on September 3, 2024 and sell it today you would earn a total of 250.00 from holding The Hartford Small or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Small vs. High Yield Fund
Performance |
| Timeline |
| Hartford Small |
| High Yield Fund |
The Hartford and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and High Yield
The main advantage of trading using opposite The Hartford and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| The Hartford vs. The Hartford Midcap | The Hartford vs. Mfs Emerging Markets | The Hartford vs. Wells Fargo Special | The Hartford vs. Washington Mutual Investors |
| High Yield vs. Baird Smallmid Cap | High Yield vs. The Hartford Small | High Yield vs. Touchstone Small Cap | High Yield vs. Ab 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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