Correlation Between Thornburg Limited and The Hartford
Can any of the company-specific risk be diversified away by investing in both Thornburg Limited 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 Thornburg Limited and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg Limited Term and The Hartford Equity, you can compare the effects of market volatilities on Thornburg Limited 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 Thornburg Limited with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Limited and The Hartford.
Diversification Opportunities for Thornburg Limited and The Hartford
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thornburg and The is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Limited Term and The Hartford Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Equity and Thornburg Limited 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 Thornburg Limited Term 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 Equity has no effect on the direction of Thornburg Limited i.e., Thornburg Limited and The Hartford go up and down completely randomly.
Pair Corralation between Thornburg Limited and The Hartford
Assuming the 90 days horizon Thornburg Limited is expected to generate 9.27 times less return on investment than The Hartford. But when comparing it to its historical volatility, Thornburg Limited Term is 3.98 times less risky than The Hartford. It trades about 0.14 of its potential returns per unit of risk. The Hartford Equity is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,201 in The Hartford Equity on September 4, 2024 and sell it today you would earn a total of 96.00 from holding The Hartford Equity or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg Limited Term vs. The Hartford Equity
Performance |
| Timeline |
| Thornburg Limited Term |
| Hartford Equity |
Thornburg Limited and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Limited and The Hartford
The main advantage of trading using opposite Thornburg Limited and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Limited 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.| Thornburg Limited vs. Thornburg Value Fund | Thornburg Limited vs. Thornburg Value Fund | Thornburg Limited vs. Thornburg International Value | Thornburg Limited vs. Thornburg International Value |
| The Hartford vs. The Hartford Dividend | The Hartford vs. The Hartford Total | The Hartford vs. The Hartford International | The Hartford vs. The Hartford Midcap |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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