Correlation Between Mid Cap and The Hartford
Can any of the company-specific risk be diversified away by investing in both Mid Cap 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 Mid Cap and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap 15x Strategy and The Hartford Balanced, you can compare the effects of market volatilities on Mid Cap 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 Mid Cap with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and The Hartford.
Diversification Opportunities for Mid Cap and The Hartford
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mid and The is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and The Hartford Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Balanced and Mid Cap 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 Mid Cap 15x Strategy 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 Mid Cap i.e., Mid Cap and The Hartford go up and down completely randomly.
Pair Corralation between Mid Cap and The Hartford
Assuming the 90 days horizon Mid Cap 15x Strategy is expected to under-perform the The Hartford. In addition to that, Mid Cap is 3.89 times more volatile than The Hartford Balanced. It trades about -0.22 of its total potential returns per unit of risk. The Hartford Balanced is currently generating about -0.33 per unit of volatility. If you would invest 1,941 in The Hartford Balanced on October 11, 2024 and sell it today you would lose (52.00) from holding The Hartford Balanced or give up 2.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap 15x Strategy vs. The Hartford Balanced
Performance |
| Timeline |
| Mid Cap 15x |
| Hartford Balanced |
Mid Cap and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Cap and The Hartford
The main advantage of trading using opposite Mid Cap and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap 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.| Mid Cap vs. Virtus Multi Strategy Target | Mid Cap vs. Calvert Emerging Markets | Mid Cap vs. Oberweis Emerging Growth | Mid Cap vs. Fidelity Series Emerging |
| The Hartford vs. Mid Cap 15x Strategy | The Hartford vs. Virtus Multi Strategy Target | The Hartford vs. Dow 2x Strategy | The Hartford vs. Black Oak Emerging |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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