Correlation Between City National and Hartford Checks
Can any of the company-specific risk be diversified away by investing in both City National and Hartford Checks 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 City National and Hartford Checks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and The Hartford Checks, you can compare the effects of market volatilities on City National and Hartford Checks 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 City National with a short position of Hartford Checks. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Hartford Checks.
Diversification Opportunities for City National and Hartford Checks
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between City and Hartford is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and The Hartford Checks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Checks and City National 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 City National Rochdale are associated (or correlated) with Hartford Checks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Checks has no effect on the direction of City National i.e., City National and Hartford Checks go up and down completely randomly.
Pair Corralation between City National and Hartford Checks
Assuming the 90 days horizon City National is expected to generate 1.3 times less return on investment than Hartford Checks. But when comparing it to its historical volatility, City National Rochdale is 3.72 times less risky than Hartford Checks. It trades about 0.25 of its potential returns per unit of risk. The Hartford Checks is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 841.00 in The Hartford Checks on September 15, 2024 and sell it today you would earn a total of 209.00 from holding The Hartford Checks or generate 24.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City National Rochdale vs. The Hartford Checks
Performance |
| Timeline |
| City National Rochdale |
| Hartford Checks |
City National and Hartford Checks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Hartford Checks
The main advantage of trading using opposite City National and Hartford Checks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Hartford Checks 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 Checks will offset losses from the drop in Hartford Checks' long position.| City National vs. City National Rochdale | City National vs. City National Rochdale | City National vs. City National Rochdale | City National vs. City National Rochdale |
| Hartford Checks vs. Janus High Yield Fund | Hartford Checks vs. Pax High Yield | Hartford Checks vs. City National Rochdale | Hartford Checks vs. Voya High Yield |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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