Correlation Between Hartford Small and New Economy
Can any of the company-specific risk be diversified away by investing in both Hartford Small and New Economy 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 New Economy 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 New Economy Fund, you can compare the effects of market volatilities on Hartford Small and New Economy 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 New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Small and New Economy.
Diversification Opportunities for Hartford Small and New Economy
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hartford and New is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Small and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund 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 New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Hartford Small i.e., Hartford Small and New Economy go up and down completely randomly.
Pair Corralation between Hartford Small and New Economy
Assuming the 90 days horizon The Hartford Small is expected to under-perform the New Economy. In addition to that, Hartford Small is 1.43 times more volatile than New Economy Fund. It trades about -0.05 of its total potential returns per unit of risk. New Economy Fund is currently generating about -0.04 per unit of volatility. If you would invest 6,966 in New Economy Fund on September 12, 2024 and sell it today you would lose (44.00) from holding New Economy Fund or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Small vs. New Economy Fund
Performance |
| Timeline |
| Hartford Small |
| New Economy Fund |
Hartford Small and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Small and New Economy
The main advantage of trading using opposite Hartford Small and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Small position performs unexpectedly, New Economy 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 New Economy will offset losses from the drop in New Economy's long position.| Hartford Small vs. Fidelity Small Cap | Hartford Small vs. Heartland Value Plus | Hartford Small vs. Amg River Road | Hartford Small vs. Lsv Small Cap |
| New Economy vs. Fidelity Advisor Gold | New Economy vs. Short Precious Metals | New Economy vs. Gabelli Gold Fund | New Economy vs. Invesco Gold Special |
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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