Correlation Between Columbia Minnesota and The Hartford
Can any of the company-specific risk be diversified away by investing in both Columbia Minnesota and The Hartford 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 Columbia Minnesota and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Minnesota Tax Exempt and The Hartford Equity, you can compare the effects of market volatilities on Columbia Minnesota and The Hartford 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 Columbia Minnesota with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Minnesota and The Hartford.
Diversification Opportunities for Columbia Minnesota and The Hartford
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and The is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Minnesota Tax Exempt and The Hartford Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Equity and Columbia Minnesota 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 Columbia Minnesota Tax Exempt are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Equity has no effect on the direction of Columbia Minnesota i.e., Columbia Minnesota and The Hartford go up and down completely randomly.
Pair Corralation between Columbia Minnesota and The Hartford
Assuming the 90 days horizon Columbia Minnesota is expected to generate 1.2 times less return on investment than The Hartford. But when comparing it to its historical volatility, Columbia Minnesota Tax Exempt is 2.69 times less risky than The Hartford. It trades about 0.06 of its potential returns per unit of risk. The Hartford Equity is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,915 in The Hartford Equity on November 27, 2024 and sell it today you would earn a total of 168.00 from holding The Hartford Equity or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Minnesota Tax Exempt vs. The Hartford Equity
Performance |
| Timeline |
| Columbia Minnesota Tax |
| Hartford Equity |
Columbia Minnesota and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Minnesota and The Hartford
The main advantage of trading using opposite Columbia Minnesota and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Minnesota position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Columbia Minnesota vs. Health Care Fund | Columbia Minnesota vs. Eventide Healthcare Life | Columbia Minnesota vs. Allianzgi Health Sciences | Columbia Minnesota vs. John Hancock Variable |
| The Hartford vs. The Hartford Dividend | The Hartford vs. The Hartford Total | The Hartford vs. The Hartford International | The Hartford 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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