Correlation Between The Hartford and Thornburg Core
Can any of the company-specific risk be diversified away by investing in both The Hartford and Thornburg Core 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 Thornburg Core 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 Thornburg E Growth, you can compare the effects of market volatilities on The Hartford and Thornburg Core 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 Thornburg Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Thornburg Core.
Diversification Opportunities for The Hartford and Thornburg Core
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Thornburg is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Small and Thornburg E Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg E Growth 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 Thornburg Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg E Growth has no effect on the direction of The Hartford i.e., The Hartford and Thornburg Core go up and down completely randomly.
Pair Corralation between The Hartford and Thornburg Core
Assuming the 90 days horizon The Hartford is expected to generate 1.25 times less return on investment than Thornburg Core. In addition to that, The Hartford is 1.02 times more volatile than Thornburg E Growth. It trades about 0.06 of its total potential returns per unit of risk. Thornburg E Growth is currently generating about 0.07 per unit of volatility. If you would invest 2,576 in Thornburg E Growth on August 29, 2024 and sell it today you would earn a total of 1,233 from holding Thornburg E Growth or generate 47.86% 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 Small vs. Thornburg E Growth
Performance |
| Timeline |
| Hartford Small |
| Thornburg E Growth |
The Hartford and Thornburg Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Thornburg Core
The main advantage of trading using opposite The Hartford and Thornburg Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Thornburg Core 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 Thornburg Core will offset losses from the drop in Thornburg Core's long position.| The Hartford vs. Vanguard Strategic Small Cap | The Hartford vs. Small Midcap Dividend Income | The Hartford vs. Qs Small Capitalization | The Hartford vs. Kinetics Small Cap |
| Thornburg Core vs. Needham Aggressive Growth | Thornburg Core vs. Western Asset High | Thornburg Core vs. Morningstar Aggressive Growth | Thornburg Core vs. Vanguard High Yield Tax Exempt |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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