Correlation Between Pace Municipal and Hartford Global
Can any of the company-specific risk be diversified away by investing in both Pace Municipal 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 Pace Municipal and Hartford Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Municipal Fixed and The Hartford Global, you can compare the effects of market volatilities on Pace Municipal 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 Pace Municipal with a short position of Hartford Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and Hartford Global.
Diversification Opportunities for Pace Municipal and Hartford Global
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pace and Hartford is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed and The Hartford Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Global and Pace Municipal 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 Pace Municipal Fixed 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 has no effect on the direction of Pace Municipal i.e., Pace Municipal and Hartford Global go up and down completely randomly.
Pair Corralation between Pace Municipal and Hartford Global
Assuming the 90 days horizon Pace Municipal is expected to generate 1.17 times less return on investment than Hartford Global. But when comparing it to its historical volatility, Pace Municipal Fixed is 3.31 times less risky than Hartford Global. It trades about 0.08 of its potential returns per unit of risk. The Hartford Global is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 814.00 in The Hartford Global on September 13, 2024 and sell it today you would earn a total of 64.00 from holding The Hartford Global or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Pace Municipal Fixed vs. The Hartford Global
Performance |
| Timeline |
| Pace Municipal Fixed |
| Hartford Global |
Pace Municipal and Hartford Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and Hartford Global
The main advantage of trading using opposite Pace Municipal and Hartford Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal 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.| Pace Municipal vs. Multisector Bond Sma | Pace Municipal vs. Franklin High Yield | Pace Municipal vs. Touchstone Premium Yield | Pace Municipal vs. Western Asset Municipal |
| Hartford Global vs. The Hartford Growth | Hartford Global vs. The Hartford Growth | Hartford Global vs. The Hartford Growth | Hartford Global 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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