Correlation Between College Retirement and The Hartford
Can any of the company-specific risk be diversified away by investing in both College Retirement 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 College Retirement and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between College Retirement Equities and The Hartford Balanced, you can compare the effects of market volatilities on College Retirement 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 College Retirement with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and The Hartford.
Diversification Opportunities for College Retirement and The Hartford
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between College and The is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities and The Hartford Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Balanced and College Retirement 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 College Retirement Equities 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 Balanced has no effect on the direction of College Retirement i.e., College Retirement and The Hartford go up and down completely randomly.
Pair Corralation between College Retirement and The Hartford
Assuming the 90 days trading horizon College Retirement Equities is expected to generate 2.19 times more return on investment than The Hartford. However, College Retirement is 2.19 times more volatile than The Hartford Balanced. It trades about -0.14 of its potential returns per unit of risk. The Hartford Balanced is currently generating about -0.34 per unit of risk. If you would invest 35,115 in College Retirement Equities on October 10, 2024 and sell it today you would lose (934.00) from holding College Retirement Equities or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
College Retirement Equities vs. The Hartford Balanced
Performance |
| Timeline |
| College Retirement |
| Hartford Balanced |
College Retirement and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with College Retirement and The Hartford
The main advantage of trading using opposite College Retirement and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement 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.| College Retirement vs. Vanguard Total Stock | College Retirement vs. Vanguard 500 Index | College Retirement vs. Vanguard Total Stock | College Retirement vs. Vanguard Total Stock |
| The Hartford vs. Mid Cap 15x Strategy | The Hartford vs. Virtus Multi Strategy Target | The Hartford vs. Dow 2x Strategy | The Hartford vs. Black Oak Emerging |
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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