Correlation Between The Hartford and Hartford Growth
Can any of the company-specific risk be diversified away by investing in both The Hartford 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 The Hartford and Hartford Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Dividend and The Hartford Growth, you can compare the effects of market volatilities on The Hartford 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 The Hartford with a short position of Hartford Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Hartford Growth.
Diversification Opportunities for The Hartford and Hartford Growth
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and Hartford is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Dividend and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford 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 Dividend 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 The Hartford i.e., The Hartford and Hartford Growth go up and down completely randomly.
Pair Corralation between The Hartford and Hartford Growth
Assuming the 90 days horizon The Hartford is expected to generate 6.85 times less return on investment than Hartford Growth. But when comparing it to its historical volatility, The Hartford Dividend is 1.9 times less risky than Hartford Growth. It trades about 0.05 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,305 in The Hartford Growth on August 25, 2024 and sell it today you would earn a total of 278.00 from holding The Hartford Growth or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Dividend vs. The Hartford Growth
Performance |
| Timeline |
| Hartford Dividend |
| Hartford Growth |
The Hartford and Hartford Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Hartford Growth
The main advantage of trading using opposite The Hartford and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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.| The Hartford vs. The Hartford Capital | The Hartford vs. The Hartford Midcap | The Hartford vs. The Hartford Total | The Hartford vs. The Hartford Equity |
| Hartford Growth vs. The Hartford Dividend | Hartford Growth vs. The Hartford Capital | Hartford Growth vs. The Hartford Equity | Hartford Growth vs. The Hartford Midcap |
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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