Correlation Between Lifestyle and Hartford Inflation
Can any of the company-specific risk be diversified away by investing in both Lifestyle and Hartford Inflation 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 Lifestyle and Hartford Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifestyle Ii Aggressive and The Hartford Inflation, you can compare the effects of market volatilities on Lifestyle and Hartford Inflation 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 Lifestyle with a short position of Hartford Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifestyle and Hartford Inflation.
Diversification Opportunities for Lifestyle and Hartford Inflation
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lifestyle and Hartford is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lifestyle Ii Aggressive and The Hartford Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Inflation and Lifestyle 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 Lifestyle Ii Aggressive are associated (or correlated) with Hartford Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Inflation has no effect on the direction of Lifestyle i.e., Lifestyle and Hartford Inflation go up and down completely randomly.
Pair Corralation between Lifestyle and Hartford Inflation
Assuming the 90 days horizon Lifestyle Ii Aggressive is expected to generate 2.36 times more return on investment than Hartford Inflation. However, Lifestyle is 2.36 times more volatile than The Hartford Inflation. It trades about 0.08 of its potential returns per unit of risk. The Hartford Inflation is currently generating about 0.04 per unit of risk. If you would invest 1,054 in Lifestyle Ii Aggressive on September 4, 2024 and sell it today you would earn a total of 364.00 from holding Lifestyle Ii Aggressive or generate 34.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifestyle Ii Aggressive vs. The Hartford Inflation
Performance |
| Timeline |
| Lifestyle Ii Aggressive |
| The Hartford Inflation |
Lifestyle and Hartford Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifestyle and Hartford Inflation
The main advantage of trading using opposite Lifestyle and Hartford Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifestyle position performs unexpectedly, Hartford Inflation 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 Inflation will offset losses from the drop in Hartford Inflation's long position.| Lifestyle vs. Regional Bank Fund | Lifestyle vs. Regional Bank Fund | Lifestyle vs. Multimanager Lifestyle Moderate | Lifestyle vs. Multimanager Lifestyle Balanced |
| Hartford Inflation vs. The Hartford Growth | Hartford Inflation vs. The Hartford Growth | Hartford Inflation vs. The Hartford Growth | Hartford Inflation vs. The Hartford Growth |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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