Correlation Between Hartford Multifactor and Virtus WMC
Can any of the company-specific risk be diversified away by investing in both Hartford Multifactor and Virtus WMC 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 Virtus WMC 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 Virtus WMC International, you can compare the effects of market volatilities on Hartford Multifactor and Virtus WMC 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 Virtus WMC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Multifactor and Virtus WMC.
Diversification Opportunities for Hartford Multifactor and Virtus WMC
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hartford and Virtus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Multifactor Developed and Virtus WMC International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus WMC 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 Virtus WMC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus WMC International has no effect on the direction of Hartford Multifactor i.e., Hartford Multifactor and Virtus WMC go up and down completely randomly.
Pair Corralation between Hartford Multifactor and Virtus WMC
Given the investment horizon of 90 days Hartford Multifactor Developed is expected to generate 0.96 times more return on investment than Virtus WMC. However, Hartford Multifactor Developed is 1.05 times less risky than Virtus WMC. It trades about -0.05 of its potential returns per unit of risk. Virtus WMC International is currently generating about -0.09 per unit of risk. If you would invest 2,989 in Hartford Multifactor Developed on October 24, 2024 and sell it today you would lose (78.00) from holding Hartford Multifactor Developed or give up 2.61% 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. Virtus WMC International
Performance |
| Timeline |
| Hartford Multifactor |
| Virtus WMC International |
Hartford Multifactor and Virtus WMC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Multifactor and Virtus WMC
The main advantage of trading using opposite Hartford Multifactor and Virtus WMC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Multifactor position performs unexpectedly, Virtus WMC 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 Virtus WMC will offset losses from the drop in Virtus WMC'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 |
| Virtus WMC vs. Franklin Templeton ETF | Virtus WMC vs. Altrius Global Dividend | Virtus WMC vs. Invesco Exchange Traded | Virtus WMC vs. Franklin International Core |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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