Correlation Between Government Securities and Hartford Growth
Can any of the company-specific risk be diversified away by investing in both Government Securities and Hartford Growth 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 Government Securities and Hartford Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Government Securities Fund and Hartford Growth Opportunities, you can compare the effects of market volatilities on Government Securities and Hartford Growth 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 Government Securities with a short position of Hartford Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Government Securities and Hartford Growth.
Diversification Opportunities for Government Securities and Hartford Growth
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Government and Hartford is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Government Securities Fund and Hartford Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth Oppo and Government Securities 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 Government Securities Fund are associated (or correlated) with Hartford Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth Oppo has no effect on the direction of Government Securities i.e., Government Securities and Hartford Growth go up and down completely randomly.
Pair Corralation between Government Securities and Hartford Growth
Assuming the 90 days horizon Government Securities is expected to generate 6.31 times less return on investment than Hartford Growth. But when comparing it to its historical volatility, Government Securities Fund is 3.76 times less risky than Hartford Growth. It trades about 0.07 of its potential returns per unit of risk. Hartford Growth Opportunities is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,609 in Hartford Growth Opportunities on September 12, 2024 and sell it today you would earn a total of 2,743 from holding Hartford Growth Opportunities or generate 59.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Government Securities Fund vs. Hartford Growth Opportunities
Performance |
| Timeline |
| Government Securities |
| Hartford Growth Oppo |
Government Securities and Hartford Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Government Securities and Hartford Growth
The main advantage of trading using opposite Government Securities and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Government Securities position performs unexpectedly, Hartford Growth 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 Growth will offset losses from the drop in Hartford Growth's long position.The idea behind Government Securities Fund and Hartford Growth Opportunities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Hartford Growth vs. American Funds The | Hartford Growth vs. American Funds The | Hartford Growth vs. Growth Fund Of | Hartford Growth vs. Growth Fund Of |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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