Correlation Between Proshares Russell and Hartford Municipal
Can any of the company-specific risk be diversified away by investing in both Proshares Russell and Hartford Municipal 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 Proshares Russell and Hartford Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Proshares Russell 2000 and Hartford Municipal Opportunities, you can compare the effects of market volatilities on Proshares Russell and Hartford Municipal 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 Proshares Russell with a short position of Hartford Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proshares Russell and Hartford Municipal.
Diversification Opportunities for Proshares Russell and Hartford Municipal
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Proshares and Hartford is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Proshares Russell 2000 and Hartford Municipal Opportuniti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Municipal and Proshares Russell 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 Proshares Russell 2000 are associated (or correlated) with Hartford Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Municipal has no effect on the direction of Proshares Russell i.e., Proshares Russell and Hartford Municipal go up and down completely randomly.
Pair Corralation between Proshares Russell and Hartford Municipal
Given the investment horizon of 90 days Proshares Russell 2000 is expected to generate 4.18 times more return on investment than Hartford Municipal. However, Proshares Russell is 4.18 times more volatile than Hartford Municipal Opportunities. It trades about 0.18 of its potential returns per unit of risk. Hartford Municipal Opportunities is currently generating about 0.07 per unit of risk. If you would invest 3,913 in Proshares Russell 2000 on August 24, 2024 and sell it today you would earn a total of 434.00 from holding Proshares Russell 2000 or generate 11.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 11.49% |
| Values | Daily Returns |
Proshares Russell 2000 vs. Hartford Municipal Opportuniti
Performance |
| Timeline |
| Proshares Russell 2000 |
| Hartford Municipal |
Proshares Russell and Hartford Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proshares Russell and Hartford Municipal
The main advantage of trading using opposite Proshares Russell and Hartford Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proshares Russell position performs unexpectedly, Hartford Municipal 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 Municipal will offset losses from the drop in Hartford Municipal's long position.| Proshares Russell vs. Global X SP | Proshares Russell vs. Global X Nasdaq | Proshares Russell vs. First Trust BuyWrite | Proshares Russell vs. Amplify CWP Enhanced |
| Hartford Municipal vs. BlackRock Intermediate Muni | Hartford Municipal vs. SSGA Active Trust | Hartford Municipal vs. SPDR MarketAxess Investment | Hartford Municipal vs. SSGA Active Trust |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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