Correlation Between Emerging Markets and The Hartford
Can any of the company-specific risk be diversified away by investing in both Emerging Markets 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 Emerging Markets and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Portfolio and The Hartford International, you can compare the effects of market volatilities on Emerging Markets 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 Emerging Markets with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and The Hartford.
Diversification Opportunities for Emerging Markets and The Hartford
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Emerging and The is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Portfolio and The Hartford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Interna and Emerging Markets 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 Emerging Markets Portfolio 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 Interna has no effect on the direction of Emerging Markets i.e., Emerging Markets and The Hartford go up and down completely randomly.
Pair Corralation between Emerging Markets and The Hartford
Assuming the 90 days horizon Emerging Markets Portfolio is expected to under-perform the The Hartford. In addition to that, Emerging Markets is 1.01 times more volatile than The Hartford International. It trades about -0.18 of its total potential returns per unit of risk. The Hartford International is currently generating about 0.08 per unit of volatility. If you would invest 1,709 in The Hartford International on August 31, 2024 and sell it today you would earn a total of 22.00 from holding The Hartford International or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Portfolio vs. The Hartford International
Performance |
| Timeline |
| Emerging Markets Por |
| Hartford Interna |
Emerging Markets and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and The Hartford
The main advantage of trading using opposite Emerging Markets and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets 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.| Emerging Markets vs. Ms Global Fixed | Emerging Markets vs. Mirova Global Green | Emerging Markets vs. Federated Global Allocation | Emerging Markets vs. T Rowe Price |
| The Hartford vs. The Hartford Dividend | The Hartford vs. The Hartford Equity | The Hartford vs. The Hartford Total | The Hartford 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 Stocks Directory module to find actively traded stocks across global markets.
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