Correlation Between Amcap Fund and Hartford Midcap
Can any of the company-specific risk be diversified away by investing in both Amcap Fund and Hartford Midcap 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 Hartford Midcap 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 Hartford Midcap 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 Hartford Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcap Fund and Hartford Midcap.
Diversification Opportunities for Amcap Fund and Hartford Midcap
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amcap and Hartford is 0.89. 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 Hartford Midcap. 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 Hartford Midcap go up and down completely randomly.
Pair Corralation between Amcap Fund and Hartford Midcap
Assuming the 90 days horizon Amcap Fund Class is expected to generate 0.71 times more return on investment than Hartford Midcap. However, Amcap Fund Class is 1.4 times less risky than Hartford Midcap. It trades about 0.05 of its potential returns per unit of risk. The Hartford Midcap is currently generating about 0.02 per unit of risk. If you would invest 4,745 in Amcap Fund Class on September 12, 2024 and sell it today you would earn a total of 34.00 from holding Amcap Fund Class or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amcap Fund Class vs. The Hartford Midcap
Performance |
| Timeline |
| Amcap Fund Class |
| Hartford Midcap |
Amcap Fund and Hartford Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amcap Fund and Hartford Midcap
The main advantage of trading using opposite Amcap Fund and Hartford Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcap Fund position performs unexpectedly, Hartford Midcap 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 Midcap will offset losses from the drop in Hartford Midcap's long position.| Amcap Fund vs. American Funds The | Amcap Fund vs. American Funds The | Amcap Fund vs. Growth Fund Of | Amcap Fund vs. Growth Fund Of |
| Hartford Midcap vs. The Hartford Midcap | Hartford Midcap vs. The Hartford Midcap | Hartford Midcap vs. Janus Enterprise Fund | Hartford Midcap vs. Janus Enterprise Fund |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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