Correlation Between Sparta Capital and The Hartford
Can any of the company-specific risk be diversified away by investing in both Sparta Capital 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 Sparta Capital and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparta Capital and The Hartford Balanced, you can compare the effects of market volatilities on Sparta Capital 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 Sparta Capital with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and The Hartford.
Diversification Opportunities for Sparta Capital and The Hartford
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sparta and The is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and The Hartford Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Balanced and Sparta Capital 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 Sparta Capital 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 Sparta Capital i.e., Sparta Capital and The Hartford go up and down completely randomly.
Pair Corralation between Sparta Capital and The Hartford
If you would invest 1,418 in The Hartford Balanced on November 5, 2024 and sell it today you would earn a total of 37.00 from holding The Hartford Balanced or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparta Capital vs. The Hartford Balanced
Performance |
| Timeline |
| Sparta Capital |
| Hartford Balanced |
Sparta Capital and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparta Capital and The Hartford
The main advantage of trading using opposite Sparta Capital and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparta Capital 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.| Sparta Capital vs. Zurn Elkay Water | Sparta Capital vs. Federal Signal | Sparta Capital vs. Energy Recovery | Sparta Capital vs. CECO Environmental Corp |
| The Hartford vs. Us Vector Equity | The Hartford vs. Smallcap World Fund | The Hartford vs. Calvert International Equity | The Hartford vs. The Growth Equity |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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