Correlation Between Old Westbury and Hartford Global
Can any of the company-specific risk be diversified away by investing in both Old Westbury 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 Old Westbury and Hartford Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Short Term and Hartford Global Impact, you can compare the effects of market volatilities on Old Westbury 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 Old Westbury with a short position of Hartford Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Hartford Global.
Diversification Opportunities for Old Westbury and Hartford Global
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Old and Hartford is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term 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 Old Westbury 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 Old Westbury Short Term 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 Old Westbury i.e., Old Westbury and Hartford Global go up and down completely randomly.
Pair Corralation between Old Westbury and Hartford Global
Assuming the 90 days horizon Old Westbury is expected to generate 7.53 times less return on investment than Hartford Global. But when comparing it to its historical volatility, Old Westbury Short Term is 5.09 times less risky than Hartford Global. It trades about 0.15 of its potential returns per unit of risk. Hartford Global Impact is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,571 in Hartford Global Impact on September 1, 2024 and sell it today you would earn a total of 49.00 from holding Hartford Global Impact or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Old Westbury Short Term vs. Hartford Global Impact
Performance |
| Timeline |
| Old Westbury Short |
| Hartford Global Impact |
Old Westbury and Hartford Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Hartford Global
The main advantage of trading using opposite Old Westbury and Hartford Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury 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.The idea behind Old Westbury Short Term and Hartford Global Impact 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.
| Hartford Global vs. Franklin Federal Limited Term | Hartford Global vs. Old Westbury Short Term | Hartford Global vs. Ultra Short Fixed Income | Hartford Global vs. Barings Active Short |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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