Correlation Between SPDR Portfolio and Hartford Multifactor
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and Hartford Multifactor 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 SPDR Portfolio and Hartford Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio SP and Hartford Multifactor Equity, you can compare the effects of market volatilities on SPDR Portfolio and Hartford Multifactor 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 SPDR Portfolio with a short position of Hartford Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and Hartford Multifactor.
Diversification Opportunities for SPDR Portfolio and Hartford Multifactor
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Hartford is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio SP and Hartford Multifactor Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Multifactor and SPDR Portfolio 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 SPDR Portfolio SP are associated (or correlated) with Hartford Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Multifactor has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and Hartford Multifactor go up and down completely randomly.
Pair Corralation between SPDR Portfolio and Hartford Multifactor
Given the investment horizon of 90 days SPDR Portfolio is expected to generate 1.3 times less return on investment than Hartford Multifactor. In addition to that, SPDR Portfolio is 1.09 times more volatile than Hartford Multifactor Equity. It trades about 0.17 of its total potential returns per unit of risk. Hartford Multifactor Equity is currently generating about 0.25 per unit of volatility. If you would invest 5,072 in Hartford Multifactor Equity on October 20, 2024 and sell it today you would earn a total of 166.00 from holding Hartford Multifactor Equity or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio SP vs. Hartford Multifactor Equity
Performance |
| Timeline |
| SPDR Portfolio SP |
| Hartford Multifactor |
SPDR Portfolio and Hartford Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and Hartford Multifactor
The main advantage of trading using opposite SPDR Portfolio and Hartford Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, Hartford Multifactor 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 Hartford Multifactor will offset losses from the drop in Hartford Multifactor's long position.| SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR SP 600 |
| Hartford Multifactor vs. Hartford Multifactor Emerging | Hartford Multifactor vs. Hartford Multifactor Developed | Hartford Multifactor vs. iShares Equity Factor | Hartford Multifactor vs. SPDR MSCI USA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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