Correlation Between Microsoft and Hartford Global
Can any of the company-specific risk be diversified away by investing in both Microsoft and Hartford Global 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 Microsoft and Hartford Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Hartford Global Impact, you can compare the effects of market volatilities on Microsoft and Hartford Global 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 Microsoft with a short position of Hartford Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Hartford Global.
Diversification Opportunities for Microsoft and Hartford Global
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microsoft and Hartford is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Hartford Global Impact in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Global Impact and Microsoft 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 Microsoft are associated (or correlated) with Hartford Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Global Impact has no effect on the direction of Microsoft i.e., Microsoft and Hartford Global go up and down completely randomly.
Pair Corralation between Microsoft and Hartford Global
Given the investment horizon of 90 days Microsoft is expected to generate 1.7 times more return on investment than Hartford Global. However, Microsoft is 1.7 times more volatile than Hartford Global Impact. It trades about 0.08 of its potential returns per unit of risk. Hartford Global Impact is currently generating about 0.05 per unit of risk. If you would invest 25,277 in Microsoft on September 3, 2024 and sell it today you would earn a total of 17,069 from holding Microsoft or generate 67.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Hartford Global Impact
Performance |
| Timeline |
| Microsoft |
| Hartford Global Impact |
Microsoft and Hartford Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Hartford Global
The main advantage of trading using opposite Microsoft and Hartford Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Hartford Global 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 Global will offset losses from the drop in Hartford Global's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Hartford Global vs. Artisan Small Cap | Hartford Global vs. Qs Small Capitalization | Hartford Global vs. Us Small Cap | Hartford Global vs. Fisher Small Cap |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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