Correlation Between Ab Bond and The Hartford

Can any of the company-specific risk be diversified away by investing in both Ab Bond 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 Ab Bond and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Bond Inflation and The Hartford Emerging, you can compare the effects of market volatilities on Ab Bond 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 Ab Bond with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and The Hartford.

Diversification Opportunities for Ab Bond and The Hartford

0.92

Correlation Coefficient

Ab Bond  The Hartford

Almost no diversification

The 3 months correlation between ABNYX and The is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and The Hartford Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Emerging and Ab 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 Ab Bond Inflation 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 Emerging has no effect on the direction of Ab Bond i.e., Ab Bond and The Hartford go up and down completely randomly.

Pair Corralation between Ab Bond and The Hartford

Assuming the 90 days horizon Ab Bond is expected to generate 1.87 times less return on investment than The Hartford. But when comparing it to its historical volatility, Ab Bond Inflation is 2.32 times less risky than The Hartford. It trades about 0.26 of its potential returns per unit of risk. The Hartford Emerging is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  443.00  in The Hartford Emerging on December 19, 2024 and sell it today you would earn a total of  24.00  from holding The Hartford Emerging or generate 5.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.33%
Values	Daily Returns

Ab Bond Inflation  vs.  The Hartford Emerging

Ab Bond Inflation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Bond Inflation are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ab Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hartford Emerging

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Emerging are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, The Hartford is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Bond and The Hartford

The main advantage of trading using opposite Ab Bond and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond 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.

The idea behind Ab Bond Inflation and The Hartford Emerging pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.