Correlation Between Scharf Global and The Hartford
Can any of the company-specific risk be diversified away by investing in both Scharf Global 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 Scharf Global and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and The Hartford Growth, you can compare the effects of market volatilities on Scharf Global 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 Scharf Global with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and The Hartford.
Diversification Opportunities for Scharf Global and The Hartford
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Scharf and The is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Scharf Global 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 Scharf Global Opportunity 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 Growth has no effect on the direction of Scharf Global i.e., Scharf Global and The Hartford go up and down completely randomly.
Pair Corralation between Scharf Global and The Hartford
Assuming the 90 days horizon Scharf Global Opportunity is expected to generate 1.08 times more return on investment than The Hartford. However, Scharf Global is 1.08 times more volatile than The Hartford Growth. It trades about 0.43 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.35 per unit of risk. If you would invest 3,642 in Scharf Global Opportunity on September 3, 2024 and sell it today you would earn a total of 187.00 from holding Scharf Global Opportunity or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. The Hartford Growth
Performance |
| Timeline |
| Scharf Global Opportunity |
| Hartford Growth |
Scharf Global and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and The Hartford
The main advantage of trading using opposite Scharf Global and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global 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.| Scharf Global vs. Prudential Jennison Financial | Scharf Global vs. 1919 Financial Services | Scharf Global vs. Mesirow Financial Small | Scharf Global vs. Gabelli Global Financial |
| The Hartford vs. Western Asset High | The Hartford vs. Lgm Risk Managed | The Hartford vs. Guggenheim High Yield | The Hartford vs. Vanguard Star Fund |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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