Correlation Between Cardinal Small and The Hartford

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

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

Diversification Opportunities for Cardinal Small and The Hartford

0.0

Correlation Coefficient

Cardinal Small  The Hartford

Pay attention - limited upside

The 3 months correlation between Cardinal and The is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Small Cap and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Cardinal Small 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 Cardinal Small Cap 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 Cardinal Small i.e., Cardinal Small and The Hartford go up and down completely randomly.

Pair Corralation between Cardinal Small and The Hartford

Assuming the 90 days horizon Cardinal Small is expected to generate 2.68 times less return on investment than The Hartford. But when comparing it to its historical volatility, Cardinal Small Cap is 1.43 times less risky than The Hartford. It trades about 0.06 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,815  in The Hartford Growth on October 14, 2024 and sell it today you would earn a total of  1,903  from holding The Hartford Growth or generate 39.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cardinal Small Cap  vs.  The Hartford Growth

Cardinal Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cardinal Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Cardinal Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hartford Growth

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental 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 Cardinal Small and The Hartford

The main advantage of trading using opposite Cardinal Small and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Small 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 Cardinal Small Cap and The Hartford Growth 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.