Correlation Between Wizz Air and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both Wizz Air and Hartford Financial 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 Wizz Air and Hartford Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and Hartford Financial Services, you can compare the effects of market volatilities on Wizz Air and Hartford Financial 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 Wizz Air with a short position of Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Hartford Financial.
Diversification Opportunities for Wizz Air and Hartford Financial
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wizz and Hartford is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and Hartford Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Financial and Wizz Air 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 Wizz Air Holdings are associated (or correlated) with Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Financial has no effect on the direction of Wizz Air i.e., Wizz Air and Hartford Financial go up and down completely randomly.
Pair Corralation between Wizz Air and Hartford Financial
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the Hartford Financial. In addition to that, Wizz Air is 3.44 times more volatile than Hartford Financial Services. It trades about -0.08 of its total potential returns per unit of risk. Hartford Financial Services is currently generating about -0.2 per unit of volatility. If you would invest 11,351 in Hartford Financial Services on October 11, 2024 and sell it today you would lose (425.00) from holding Hartford Financial Services or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. Hartford Financial Services
Performance |
| Timeline |
| Wizz Air Holdings |
| Hartford Financial |
Wizz Air and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and Hartford Financial
The main advantage of trading using opposite Wizz Air and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air position performs unexpectedly, Hartford Financial 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 Financial will offset losses from the drop in Hartford Financial's long position.| Wizz Air vs. SMA Solar Technology | Wizz Air vs. Take Two Interactive Software | Wizz Air vs. Micron Technology | Wizz Air vs. Applied Materials |
| Hartford Financial vs. Livermore Investments Group | Hartford Financial vs. Wizz Air Holdings | Hartford Financial vs. Sealed Air Corp | Hartford Financial vs. New Residential Investment |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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