Correlation Between Hartford Balanced and Boston Trust
Can any of the company-specific risk be diversified away by investing in both Hartford Balanced and Boston Trust 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 Balanced and Boston Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Balanced and Boston Trust Asset, you can compare the effects of market volatilities on Hartford Balanced and Boston Trust 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 Balanced with a short position of Boston Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Balanced and Boston Trust.
Diversification Opportunities for Hartford Balanced and Boston Trust
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartford and Boston is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Balanced and Boston Trust Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Trust Asset and Hartford Balanced 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 Balanced are associated (or correlated) with Boston Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Trust Asset has no effect on the direction of Hartford Balanced i.e., Hartford Balanced and Boston Trust go up and down completely randomly.
Pair Corralation between Hartford Balanced and Boston Trust
Assuming the 90 days horizon The Hartford Balanced is expected to generate 0.58 times more return on investment than Boston Trust. However, The Hartford Balanced is 1.71 times less risky than Boston Trust. It trades about 0.23 of its potential returns per unit of risk. Boston Trust Asset is currently generating about 0.09 per unit of risk. If you would invest 1,890 in The Hartford Balanced on October 24, 2024 and sell it today you would earn a total of 27.00 from holding The Hartford Balanced or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Balanced vs. Boston Trust Asset
Performance |
| Timeline |
| Hartford Balanced |
| Boston Trust Asset |
Hartford Balanced and Boston Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Balanced and Boston Trust
The main advantage of trading using opposite Hartford Balanced and Boston Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Balanced position performs unexpectedly, Boston Trust 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 Boston Trust will offset losses from the drop in Boston Trust's long position.| Hartford Balanced vs. The Hartford Balanced | Hartford Balanced vs. The Hartford Balanced | Hartford Balanced vs. The Hartford Midcap | Hartford Balanced vs. Boston Trust Asset |
| Boston Trust vs. Walden Asset Management | Boston Trust vs. Boston Trust Midcap | Boston Trust vs. Boston Trust Equity | Boston Trust vs. Boston Trust Small |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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