Correlation Between Bond Market and The Hartford
Can any of the company-specific risk be diversified away by investing in both Bond Market 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 Bond Market and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bond Market Index and The Hartford Small, you can compare the effects of market volatilities on Bond Market 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 Bond Market with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bond Market and The Hartford.
Diversification Opportunities for Bond Market and The Hartford
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bond and The is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bond Market Index and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small and Bond Market 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 Bond Market Index 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 Small has no effect on the direction of Bond Market i.e., Bond Market and The Hartford go up and down completely randomly.
Pair Corralation between Bond Market and The Hartford
Assuming the 90 days horizon Bond Market is expected to generate 9.82 times less return on investment than The Hartford. But when comparing it to its historical volatility, Bond Market Index is 3.79 times less risky than The Hartford. It trades about 0.13 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,864 in The Hartford Small on September 1, 2024 and sell it today you would earn a total of 289.00 from holding The Hartford Small or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bond Market Index vs. The Hartford Small
Performance |
| Timeline |
| Bond Market Index |
| Hartford Small |
Bond Market and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bond Market and The Hartford
The main advantage of trading using opposite Bond Market and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bond Market 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.| Bond Market vs. The Hartford Small | Bond Market vs. Victory Rs Small | Bond Market vs. Tax Managed Mid Small | Bond Market vs. Small Pany Growth |
| The Hartford vs. Ab All Market | The Hartford vs. Ep Emerging Markets | The Hartford vs. Artisan Emerging Markets | The Hartford vs. Origin Emerging Markets |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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