Correlation Between Short-term Municipal and The Hartford
Can any of the company-specific risk be diversified away by investing in both Short-term Municipal 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 Short-term Municipal and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Term Municipal Bond and The Hartford Inflation, you can compare the effects of market volatilities on Short-term Municipal 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 Short-term Municipal with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short-term Municipal and The Hartford.
Diversification Opportunities for Short-term Municipal and The Hartford
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Short-term and The is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Short Term Municipal Bond and The Hartford Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Inflation and Short-term Municipal 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 Short Term Municipal Bond 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 The Hartford Inflation has no effect on the direction of Short-term Municipal i.e., Short-term Municipal and The Hartford go up and down completely randomly.
Pair Corralation between Short-term Municipal and The Hartford
Assuming the 90 days horizon Short-term Municipal is expected to generate 1.18 times less return on investment than The Hartford. But when comparing it to its historical volatility, Short Term Municipal Bond is 3.01 times less risky than The Hartford. It trades about 0.21 of its potential returns per unit of risk. The Hartford Inflation is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 979.00 in The Hartford Inflation on September 1, 2024 and sell it today you would earn a total of 24.00 from holding The Hartford Inflation or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Term Municipal Bond vs. The Hartford Inflation
Performance |
| Timeline |
| Short Term Municipal |
| The Hartford Inflation |
Short-term Municipal and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short-term Municipal and The Hartford
The main advantage of trading using opposite Short-term Municipal and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short-term Municipal 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.| Short-term Municipal vs. Municipal Bond Fund | Short-term Municipal vs. Thornburg Limited Term | Short-term Municipal vs. Wells Fargo Advantage | Short-term Municipal vs. Wells Fargo Advantage |
| The Hartford vs. Us Government Securities | The Hartford vs. Us Government Securities | The Hartford vs. Dws Government Money | The Hartford vs. Franklin Government Money |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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