Correlation Between Amcap Fund and The Hartford
Can any of the company-specific risk be diversified away by investing in both Amcap Fund 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 Amcap Fund and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amcap Fund Class and The Hartford Midcap, you can compare the effects of market volatilities on Amcap Fund 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 Amcap Fund with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcap Fund and The Hartford.
Diversification Opportunities for Amcap Fund and The Hartford
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amcap and The is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Amcap Fund Class and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap and Amcap Fund 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 Amcap Fund Class 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 Midcap has no effect on the direction of Amcap Fund i.e., Amcap Fund and The Hartford go up and down completely randomly.
Pair Corralation between Amcap Fund and The Hartford
Assuming the 90 days horizon Amcap Fund is expected to generate 3.37 times less return on investment than The Hartford. But when comparing it to its historical volatility, Amcap Fund Class is 1.17 times less risky than The Hartford. It trades about 0.11 of its potential returns per unit of risk. The Hartford Midcap is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,845 in The Hartford Midcap on August 30, 2024 and sell it today you would earn a total of 214.00 from holding The Hartford Midcap or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amcap Fund Class vs. The Hartford Midcap
Performance |
| Timeline |
| Amcap Fund Class |
| Hartford Midcap |
Amcap Fund and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amcap Fund and The Hartford
The main advantage of trading using opposite Amcap Fund and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcap Fund 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.| Amcap Fund vs. John Hancock Government | Amcap Fund vs. Federated Government Ultrashort | Amcap Fund vs. Fidelity Series Government | Amcap Fund vs. Inverse Government Long |
| The Hartford vs. Europacific Growth Fund | The Hartford vs. Washington Mutual Investors | The Hartford vs. Wells Fargo Special | The Hartford vs. Mfs 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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