Correlation Between SPDR MSCI and Hartford Multifactor
Can any of the company-specific risk be diversified away by investing in both SPDR MSCI and Hartford Multifactor 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 SPDR MSCI and Hartford Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI USA and Hartford Multifactor Developed, you can compare the effects of market volatilities on SPDR MSCI and Hartford Multifactor 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 SPDR MSCI with a short position of Hartford Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and Hartford Multifactor.
Diversification Opportunities for SPDR MSCI and Hartford Multifactor
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and Hartford is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI USA and Hartford Multifactor Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Multifactor and SPDR MSCI 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 SPDR MSCI USA are associated (or correlated) with Hartford Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Multifactor has no effect on the direction of SPDR MSCI i.e., SPDR MSCI and Hartford Multifactor go up and down completely randomly.
Pair Corralation between SPDR MSCI and Hartford Multifactor
Considering the 90-day investment horizon SPDR MSCI USA is expected to generate 1.17 times more return on investment than Hartford Multifactor. However, SPDR MSCI is 1.17 times more volatile than Hartford Multifactor Developed. It trades about 0.14 of its potential returns per unit of risk. Hartford Multifactor Developed is currently generating about -0.14 per unit of risk. If you would invest 15,755 in SPDR MSCI USA on August 29, 2024 and sell it today you would earn a total of 602.00 from holding SPDR MSCI USA or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR MSCI USA vs. Hartford Multifactor Developed
Performance |
| Timeline |
| SPDR MSCI USA |
| Hartford Multifactor |
SPDR MSCI and Hartford Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MSCI and Hartford Multifactor
The main advantage of trading using opposite SPDR MSCI and Hartford Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI position performs unexpectedly, Hartford Multifactor 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 Multifactor will offset losses from the drop in Hartford Multifactor's long position.| SPDR MSCI vs. SPDR SSGA Large | SPDR MSCI vs. SPDR MSCI EAFE | SPDR MSCI vs. SPDR MSCI Emerging | SPDR MSCI vs. SPDR Russell 1000 |
| Hartford Multifactor vs. Goldman Sachs ActiveBeta | Hartford Multifactor vs. Hartford Multifactor Equity | Hartford Multifactor vs. iShares Edge MSCI | Hartford Multifactor vs. Hartford Multifactor 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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