Correlation Between Nationwide Highmark and Hartford Schroders

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Can any of the company-specific risk be diversified away by investing in both Nationwide Highmark and Hartford Schroders 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 Nationwide Highmark and Hartford Schroders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Highmark Small and Hartford Schroders Smallmid, you can compare the effects of market volatilities on Nationwide Highmark and Hartford Schroders 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 Nationwide Highmark with a short position of Hartford Schroders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Highmark and Hartford Schroders.

Diversification Opportunities for Nationwide Highmark and Hartford Schroders

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Nationwide and Hartford is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Highmark Small and Hartford Schroders Smallmid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Schroders and Nationwide Highmark 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 Nationwide Highmark Small are associated (or correlated) with Hartford Schroders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Schroders has no effect on the direction of Nationwide Highmark i.e., Nationwide Highmark and Hartford Schroders go up and down completely randomly.

Pair Corralation between Nationwide Highmark and Hartford Schroders

Assuming the 90 days horizon Nationwide Highmark is expected to generate 1.26 times less return on investment than Hartford Schroders. In addition to that, Nationwide Highmark is 1.32 times more volatile than Hartford Schroders Smallmid. It trades about 0.02 of its total potential returns per unit of risk. Hartford Schroders Smallmid is currently generating about 0.04 per unit of volatility. If you would invest  1,740  in Hartford Schroders Smallmid on November 2, 2024 and sell it today you would earn a total of  278.00  from holding Hartford Schroders Smallmid or generate 15.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Nationwide Highmark Small  vs.  Hartford Schroders Smallmid

 Performance 
       Timeline  
Nationwide Highmark Small 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nationwide Highmark Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Nationwide Highmark is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Hartford Schroders 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hartford Schroders Smallmid has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hartford Schroders is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nationwide Highmark and Hartford Schroders Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nationwide Highmark and Hartford Schroders

The main advantage of trading using opposite Nationwide Highmark and Hartford Schroders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Highmark position performs unexpectedly, Hartford Schroders 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 Schroders will offset losses from the drop in Hartford Schroders' long position.
The idea behind Nationwide Highmark Small and Hartford Schroders Smallmid pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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