Correlation Between Gelsenwasser and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both Gelsenwasser 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 Gelsenwasser and Hartford Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gelsenwasser AG and The Hartford Financial, you can compare the effects of market volatilities on Gelsenwasser 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 Gelsenwasser with a short position of Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gelsenwasser and Hartford Financial.
Diversification Opportunities for Gelsenwasser and Hartford Financial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gelsenwasser and Hartford is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Gelsenwasser AG and The Hartford Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Financial and Gelsenwasser 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 Gelsenwasser AG 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 The Hartford Financial has no effect on the direction of Gelsenwasser i.e., Gelsenwasser and Hartford Financial go up and down completely randomly.
Pair Corralation between Gelsenwasser and Hartford Financial
Assuming the 90 days horizon Gelsenwasser is expected to generate 12.89 times less return on investment than Hartford Financial. In addition to that, Gelsenwasser is 1.78 times more volatile than The Hartford Financial. It trades about 0.01 of its total potential returns per unit of risk. The Hartford Financial is currently generating about 0.33 per unit of volatility. If you would invest 10,155 in The Hartford Financial on September 5, 2024 and sell it today you would earn a total of 1,345 from holding The Hartford Financial or generate 13.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gelsenwasser AG vs. The Hartford Financial
Performance |
| Timeline |
| Gelsenwasser AG |
| The Hartford Financial |
Gelsenwasser and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gelsenwasser and Hartford Financial
The main advantage of trading using opposite Gelsenwasser and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gelsenwasser 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.| Gelsenwasser vs. HF FOODS GRP | Gelsenwasser vs. Tower One Wireless | Gelsenwasser vs. Lery Seafood Group | Gelsenwasser vs. MAVEN WIRELESS SWEDEN |
| Hartford Financial vs. Berkshire Hathaway | Hartford Financial vs. AXA SA | Hartford Financial vs. AXA SA | Hartford Financial vs. Swiss Life Holding |
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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