Correlation Between Hartford Multifactor and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Hartford Multifactor and SPDR SP 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 Hartford Multifactor and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Multifactor Developed and SPDR SP International, you can compare the effects of market volatilities on Hartford Multifactor and SPDR SP 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 Hartford Multifactor with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Multifactor and SPDR SP.
Diversification Opportunities for Hartford Multifactor and SPDR SP
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hartford and SPDR is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Multifactor Developed and SPDR SP International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP International and Hartford Multifactor 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 Hartford Multifactor Developed are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP International has no effect on the direction of Hartford Multifactor i.e., Hartford Multifactor and SPDR SP go up and down completely randomly.
Pair Corralation between Hartford Multifactor and SPDR SP
Given the investment horizon of 90 days Hartford Multifactor Developed is expected to generate 0.94 times more return on investment than SPDR SP. However, Hartford Multifactor Developed is 1.06 times less risky than SPDR SP. It trades about -0.07 of its potential returns per unit of risk. SPDR SP International is currently generating about -0.1 per unit of risk. If you would invest 2,978 in Hartford Multifactor Developed on August 28, 2024 and sell it today you would lose (27.00) from holding Hartford Multifactor Developed or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Multifactor Developed vs. SPDR SP International
Performance |
| Timeline |
| Hartford Multifactor |
| SPDR SP International |
Hartford Multifactor and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Multifactor and SPDR SP
The main advantage of trading using opposite Hartford Multifactor and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Multifactor position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Hartford Multifactor vs. Goldman Sachs ActiveBeta | Hartford Multifactor vs. Hartford Multifactor Equity | Hartford Multifactor vs. iShares Edge MSCI | Hartford Multifactor vs. Hartford Multifactor Emerging |
| SPDR SP vs. SPDR SP Emerging | SPDR SP vs. iShares International Select | SPDR SP vs. First Trust Dow | SPDR SP vs. Invesco International 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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