Correlation Between California Bond and Hartford High
Can any of the company-specific risk be diversified away by investing in both California Bond and Hartford High 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 California Bond and Hartford High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and The Hartford High, you can compare the effects of market volatilities on California Bond and Hartford High 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 California Bond with a short position of Hartford High. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Hartford High.
Diversification Opportunities for California Bond and Hartford High
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between California and Hartford is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and The Hartford High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford High and California Bond 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 California Bond Fund are associated (or correlated) with Hartford High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford High has no effect on the direction of California Bond i.e., California Bond and Hartford High go up and down completely randomly.
Pair Corralation between California Bond and Hartford High
Assuming the 90 days horizon California Bond is expected to generate 2.18 times less return on investment than Hartford High. In addition to that, California Bond is 1.02 times more volatile than The Hartford High. It trades about 0.06 of its total potential returns per unit of risk. The Hartford High is currently generating about 0.14 per unit of volatility. If you would invest 611.00 in The Hartford High on September 12, 2024 and sell it today you would earn a total of 86.00 from holding The Hartford High or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
California Bond Fund vs. The Hartford High
Performance |
| Timeline |
| California Bond |
| Hartford High |
California Bond and Hartford High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Hartford High
The main advantage of trading using opposite California Bond and Hartford High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond position performs unexpectedly, Hartford High 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 High will offset losses from the drop in Hartford High's long position.| California Bond vs. Vanguard California Long Term | California Bond vs. Vanguard California Long Term | California Bond vs. SCOR PK | California Bond vs. Morningstar Unconstrained Allocation |
| Hartford High vs. California Bond Fund | Hartford High vs. Artisan High Income | Hartford High vs. Ambrus Core Bond | Hartford High vs. The National Tax Free |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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