Correlation Between Pace High and Hartford Small
Can any of the company-specific risk be diversified away by investing in both Pace High and Hartford Small 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 High and Hartford Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace High Yield and The Hartford Small, you can compare the effects of market volatilities on Pace High and Hartford Small 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 High with a short position of Hartford Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace High and Hartford Small.
Diversification Opportunities for Pace High and Hartford Small
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pace and Hartford is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small and Pace High 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 High Yield are associated (or correlated) with Hartford Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small has no effect on the direction of Pace High i.e., Pace High and Hartford Small go up and down completely randomly.
Pair Corralation between Pace High and Hartford Small
Assuming the 90 days horizon Pace High Yield is expected to generate 0.08 times more return on investment than Hartford Small. However, Pace High Yield is 11.83 times less risky than Hartford Small. It trades about 0.38 of its potential returns per unit of risk. The Hartford Small is currently generating about -0.02 per unit of risk. If you would invest 896.00 in Pace High Yield on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Pace High Yield or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace High Yield vs. The Hartford Small
Performance |
| Timeline |
| Pace High Yield |
| Hartford Small |
Pace High and Hartford Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace High and Hartford Small
The main advantage of trading using opposite Pace High and Hartford Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High position performs unexpectedly, Hartford Small 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 Small will offset losses from the drop in Hartford Small's long position.| Pace High vs. SCOR PK | Pace High vs. Morningstar Unconstrained Allocation | Pace High vs. Via Renewables | Pace High vs. Bondbloxx ETF Trust |
| Hartford Small vs. Morningstar Defensive Bond | Hartford Small vs. The National Tax Free | Hartford Small vs. Multisector Bond Sma | Hartford Small vs. Pace High Yield |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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