Correlation Between Smallcap World and Hartford Global
Can any of the company-specific risk be diversified away by investing in both Smallcap World and Hartford Global 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 Smallcap World and Hartford Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap World Fund and Hartford Global Impact, you can compare the effects of market volatilities on Smallcap World and Hartford Global 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 Smallcap World with a short position of Hartford Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap World and Hartford Global.
Diversification Opportunities for Smallcap World and Hartford Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Smallcap and Hartford is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap World Fund and Hartford Global Impact in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Global Impact and Smallcap World 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 Smallcap World Fund are associated (or correlated) with Hartford Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Global Impact has no effect on the direction of Smallcap World i.e., Smallcap World and Hartford Global go up and down completely randomly.
Pair Corralation between Smallcap World and Hartford Global
Assuming the 90 days horizon Smallcap World Fund is expected to generate 1.3 times more return on investment than Hartford Global. However, Smallcap World is 1.3 times more volatile than Hartford Global Impact. It trades about 0.17 of its potential returns per unit of risk. Hartford Global Impact is currently generating about 0.11 per unit of risk. If you would invest 7,244 in Smallcap World Fund on August 29, 2024 and sell it today you would earn a total of 233.00 from holding Smallcap World Fund or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap World Fund vs. Hartford Global Impact
Performance |
| Timeline |
| Smallcap World |
| Hartford Global Impact |
Smallcap World and Hartford Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap World and Hartford Global
The main advantage of trading using opposite Smallcap World and Hartford Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap World position performs unexpectedly, Hartford Global 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 Global will offset losses from the drop in Hartford Global's long position.| Smallcap World vs. American Funds Fundamental | Smallcap World vs. Amcap Fund Class | Smallcap World vs. New World Fund | Smallcap World vs. Washington Mutual Investors |
| Hartford Global vs. Hartford E Equity | Hartford Global vs. The Hartford Growth | Hartford Global vs. The Hartford Municipal | Hartford Global vs. The Hartford Dividend |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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