Correlation Between Driehaus Micro and The Hartford

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

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

Diversification Opportunities for Driehaus Micro and The Hartford

0.91

Correlation Coefficient

Driehaus Micro  The Hartford

Almost no diversification

The 3 months correlation between Driehaus and The is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Driehaus Micro Cap and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap and Driehaus Micro 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 Driehaus Micro 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 Midcap has no effect on the direction of Driehaus Micro i.e., Driehaus Micro and The Hartford go up and down completely randomly.

Pair Corralation between Driehaus Micro and The Hartford

Assuming the 90 days horizon Driehaus Micro Cap is expected to under-perform the The Hartford. In addition to that, Driehaus Micro is 1.26 times more volatile than The Hartford Midcap. It trades about -0.15 of its total potential returns per unit of risk. The Hartford Midcap is currently generating about -0.1 per unit of volatility. If you would invest  2,712  in The Hartford Midcap on December 29, 2024 and sell it today you would lose (265.00) from holding The Hartford Midcap or give up 9.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Driehaus Micro Cap  vs.  The Hartford Midcap

Driehaus Micro Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Driehaus Micro Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Hartford Midcap

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Hartford Midcap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward 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 Driehaus Micro and The Hartford

The main advantage of trading using opposite Driehaus Micro and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Driehaus Micro 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 Driehaus Micro Cap and The Hartford Midcap 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.