Correlation Between Ab Government and The Hartford

Can any of the company-specific risk be diversified away by investing in both Ab Government 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 Government 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 Government Exchange and The Hartford Emerging, you can compare the effects of market volatilities on Ab Government 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 Government with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Government and The Hartford.

Diversification Opportunities for Ab Government and The Hartford

0.0

Correlation Coefficient

Ab Government  The Hartford

Pay attention - limited upside

The 3 months correlation between AEYXX and The is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ab Government Exchange 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 Government 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 Government Exchange 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 Government i.e., Ab Government and The Hartford go up and down completely randomly.

Pair Corralation between Ab Government and The Hartford

Assuming the 90 days horizon Ab Government Exchange is expected to generate 129.03 times more return on investment than The Hartford. However, Ab Government is 129.03 times more volatile than The Hartford Emerging. It trades about 0.11 of its potential returns per unit of risk. The Hartford Emerging is currently generating about 0.02 per unit of risk. If you would invest  408.00  in Ab Government Exchange on October 4, 2024 and sell it today you would lose (308.00) from holding Ab Government Exchange or give up 75.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	53.13%
Values	Daily Returns

Ab Government Exchange  vs.  The Hartford Emerging

Ab Government Exchange

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Government Exchange has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ab Government 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

0 of 100

Very Weak

Over the last 90 days The Hartford Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Ab Government and The Hartford

The main advantage of trading using opposite Ab Government and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Government 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 Government Exchange 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.