Correlation Between Meridian Small and The Hartford
Can any of the company-specific risk be diversified away by investing in both Meridian Small 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 Meridian Small and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meridian Small Cap and The Hartford Midcap, you can compare the effects of market volatilities on Meridian Small 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 Meridian Small with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Small and The Hartford.
Diversification Opportunities for Meridian Small and The Hartford
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Meridian and The is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Small Cap and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap and Meridian Small 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 Meridian Small Cap 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 Midcap has no effect on the direction of Meridian Small i.e., Meridian Small and The Hartford go up and down completely randomly.
Pair Corralation between Meridian Small and The Hartford
Assuming the 90 days horizon Meridian Small is expected to generate 1.26 times less return on investment than The Hartford. In addition to that, Meridian Small is 1.19 times more volatile than The Hartford Midcap. It trades about 0.3 of its total potential returns per unit of risk. The Hartford Midcap is currently generating about 0.45 per unit of volatility. If you would invest 2,801 in The Hartford Midcap on September 4, 2024 and sell it today you would earn a total of 271.00 from holding The Hartford Midcap or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Small Cap vs. The Hartford Midcap
Performance |
| Timeline |
| Meridian Small Cap |
| Hartford Midcap |
Meridian Small and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Small and The Hartford
The main advantage of trading using opposite Meridian Small and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Small 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.| Meridian Small vs. Invesco Porate Bond | Meridian Small vs. Invesco Stock Fund | Meridian Small vs. Invesco Growth And | Meridian Small vs. Invesco Equity And |
| The Hartford vs. Europacific Growth Fund | The Hartford vs. Washington Mutual Investors | The Hartford vs. Wells Fargo Special | The Hartford vs. Mfs Emerging Markets |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |