Correlation Between Bond Fund and Hartford Growth

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

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

Diversification Opportunities for Bond Fund and Hartford Growth

-0.13

Correlation Coefficient

Bond Fund  Hartford Growth

Good diversification

The 3 months correlation between Bond and Hartford is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding The Bond Fund and Hartford Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth Oppo and Bond Fund 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 The Bond Fund are associated (or correlated) with Hartford Growth. 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 Oppo has no effect on the direction of Bond Fund i.e., Bond Fund and Hartford Growth go up and down completely randomly.

Pair Corralation between Bond Fund and Hartford Growth

Assuming the 90 days horizon The Bond Fund is expected to under-perform the Hartford Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Bond Fund is 3.65 times less risky than Hartford Growth. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Hartford Growth Opportunities is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  6,956  in Hartford Growth Opportunities on October 22, 2024 and sell it today you would earn a total of  462.00  from holding Hartford Growth Opportunities or generate 6.64% return on investment over 90 days.

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

The Bond Fund  vs.  Hartford Growth Opportunities

Bond Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hartford Growth Oppo

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Growth Opportunities are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hartford Growth may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bond Fund and Hartford Growth

The main advantage of trading using opposite Bond Fund and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bond Fund position performs unexpectedly, Hartford Growth 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 Growth will offset losses from the drop in Hartford Growth's long position.

The idea behind The Bond Fund and Hartford Growth Opportunities 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.