Correlation Between IShares Equity and Hartford Multifactor
Can any of the company-specific risk be diversified away by investing in both IShares Equity and Hartford Multifactor 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 IShares Equity and Hartford Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Equity Factor and Hartford Multifactor Developed, you can compare the effects of market volatilities on IShares Equity and Hartford Multifactor 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 IShares Equity with a short position of Hartford Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Equity and Hartford Multifactor.
Diversification Opportunities for IShares Equity and Hartford Multifactor
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and Hartford is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding iShares Equity Factor and Hartford Multifactor Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Multifactor and IShares Equity 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 iShares Equity Factor are associated (or correlated) with Hartford Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Multifactor has no effect on the direction of IShares Equity i.e., IShares Equity and Hartford Multifactor go up and down completely randomly.
Pair Corralation between IShares Equity and Hartford Multifactor
Given the investment horizon of 90 days iShares Equity Factor is expected to generate 1.69 times more return on investment than Hartford Multifactor. However, IShares Equity is 1.69 times more volatile than Hartford Multifactor Developed. It trades about 0.17 of its potential returns per unit of risk. Hartford Multifactor Developed is currently generating about 0.15 per unit of risk. If you would invest 6,009 in iShares Equity Factor on October 20, 2024 and sell it today you would earn a total of 174.00 from holding iShares Equity Factor or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Equity Factor vs. Hartford Multifactor Developed
Performance |
| Timeline |
| iShares Equity Factor |
| Hartford Multifactor |
IShares Equity and Hartford Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Equity and Hartford Multifactor
The main advantage of trading using opposite IShares Equity and Hartford Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Equity position performs unexpectedly, Hartford Multifactor 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 Multifactor will offset losses from the drop in Hartford Multifactor's long position.| IShares Equity vs. iShares Edge MSCI | IShares Equity vs. iShares MSCI USA | IShares Equity vs. iShares MSCI USA | IShares Equity vs. Goldman Sachs ActiveBeta |
| Hartford Multifactor vs. Goldman Sachs ActiveBeta | Hartford Multifactor vs. Hartford Multifactor Equity | Hartford Multifactor vs. iShares Edge MSCI | Hartford Multifactor vs. Hartford Multifactor Emerging |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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