Correlation Between Moderate Strategy and The Hartford
Can any of the company-specific risk be diversified away by investing in both Moderate Strategy 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 Moderate Strategy and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderate Strategy Fund and The Hartford Balanced, you can compare the effects of market volatilities on Moderate Strategy 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 Moderate Strategy with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderate Strategy and The Hartford.
Diversification Opportunities for Moderate Strategy and The Hartford
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Moderate and The is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Moderate Strategy Fund and The Hartford Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Balanced and Moderate Strategy 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 Moderate Strategy Fund 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 Balanced has no effect on the direction of Moderate Strategy i.e., Moderate Strategy and The Hartford go up and down completely randomly.
Pair Corralation between Moderate Strategy and The Hartford
Assuming the 90 days horizon Moderate Strategy Fund is expected to generate 0.97 times more return on investment than The Hartford. However, Moderate Strategy Fund is 1.03 times less risky than The Hartford. It trades about 0.03 of its potential returns per unit of risk. The Hartford Balanced is currently generating about 0.03 per unit of risk. If you would invest 966.00 in Moderate Strategy Fund on August 25, 2024 and sell it today you would earn a total of 2.00 from holding Moderate Strategy Fund or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moderate Strategy Fund vs. The Hartford Balanced
Performance |
| Timeline |
| Moderate Strategy |
| Hartford Balanced |
Moderate Strategy and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderate Strategy and The Hartford
The main advantage of trading using opposite Moderate Strategy and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderate Strategy 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.| Moderate Strategy vs. The Hartford Balanced | Moderate Strategy vs. HUMANA INC | Moderate Strategy vs. Aquagold International | Moderate Strategy vs. Barloworld Ltd ADR |
| The Hartford vs. Vanguard Global Credit | The Hartford vs. T Rowe Price | The Hartford vs. Morgan Stanley Global | The Hartford vs. Mirova Global Green |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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