Correlation Between Pace Municipal and The Hartford
Can any of the company-specific risk be diversified away by investing in both Pace Municipal 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 Pace Municipal and The Hartford 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 International, you can compare the effects of market volatilities on Pace Municipal 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 Pace Municipal with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and The Hartford.
Diversification Opportunities for Pace Municipal and The Hartford
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PACE and The is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed and The Hartford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Interna 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 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 Interna has no effect on the direction of Pace Municipal i.e., Pace Municipal and The Hartford go up and down completely randomly.
Pair Corralation between Pace Municipal and The Hartford
Assuming the 90 days horizon Pace Municipal Fixed is expected to generate 0.33 times more return on investment than The Hartford. However, Pace Municipal Fixed is 3.05 times less risky than The Hartford. It trades about 0.08 of its potential returns per unit of risk. The Hartford International is currently generating about -0.23 per unit of risk. If you would invest 1,215 in Pace Municipal Fixed on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Pace Municipal Fixed or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Municipal Fixed vs. The Hartford International
Performance |
| Timeline |
| Pace Municipal Fixed |
| Hartford Interna |
Pace Municipal and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and The Hartford
The main advantage of trading using opposite Pace Municipal and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal 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.| Pace Municipal vs. Pimco Diversified Income | Pace Municipal vs. Massmutual Premier Diversified | Pace Municipal vs. Huber Capital Diversified | Pace Municipal vs. Western Asset Diversified |
| The Hartford vs. Versatile Bond Portfolio | The Hartford vs. Pace Municipal Fixed | The Hartford vs. T Rowe Price | The Hartford vs. T Rowe Price |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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