Correlation Between Ivy Natural and Hartford Growth
Can any of the company-specific risk be diversified away by investing in both Ivy Natural and Hartford Growth 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 Ivy Natural and Hartford Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivy Natural Resources and The Hartford Growth, you can compare the effects of market volatilities on Ivy Natural and Hartford Growth 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 Ivy Natural with a short position of Hartford Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Natural and Hartford Growth.
Diversification Opportunities for Ivy Natural and Hartford Growth
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivy and Hartford is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Natural Resources and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Ivy Natural 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 Ivy Natural Resources are associated (or correlated) with Hartford Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Ivy Natural i.e., Ivy Natural and Hartford Growth go up and down completely randomly.
Pair Corralation between Ivy Natural and Hartford Growth
Assuming the 90 days horizon Ivy Natural is expected to generate 1.74 times less return on investment than Hartford Growth. But when comparing it to its historical volatility, Ivy Natural Resources is 1.16 times less risky than Hartford Growth. It trades about 0.23 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 6,183 in The Hartford Growth on September 1, 2024 and sell it today you would earn a total of 455.00 from holding The Hartford Growth or generate 7.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ivy Natural Resources vs. The Hartford Growth
Performance |
| Timeline |
| Ivy Natural Resources |
| Hartford Growth |
Ivy Natural and Hartford Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivy Natural and Hartford Growth
The main advantage of trading using opposite Ivy Natural and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivy Natural position performs unexpectedly, Hartford Growth 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 Hartford Growth will offset losses from the drop in Hartford Growth's long position.| Ivy Natural vs. Ivy Large Cap | Ivy Natural vs. Ivy Small Cap | Ivy Natural vs. Ivy High Income | Ivy Natural vs. Ivy Apollo Multi Asset |
| Hartford Growth vs. Jpmorgan Trust I | Hartford Growth vs. Transamerica Funds | Hartford Growth vs. Franklin Government Money | Hartford Growth vs. Pimco Funds |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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