Correlation Between Oil Gas and Hartford Growth

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

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

Diversification Opportunities for Oil Gas and Hartford Growth

-0.17

Correlation Coefficient

Oil Gas  Hartford Growth

Good diversification

The 3 months correlation between Oil and Hartford is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector 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 Oil Gas 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 Oil Gas Ultrasector 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 Oil Gas i.e., Oil Gas and Hartford Growth go up and down completely randomly.

Pair Corralation between Oil Gas and Hartford Growth

Assuming the 90 days horizon Oil Gas Ultrasector is expected to under-perform the Hartford Growth. In addition to that, Oil Gas is 1.4 times more volatile than Hartford Growth Opportunities. It trades about -0.01 of its total potential returns per unit of risk. Hartford Growth Opportunities is currently generating about 0.11 per unit of volatility. If you would invest  4,784  in Hartford Growth Opportunities on October 4, 2024 and sell it today you would earn a total of  2,541  from holding Hartford Growth Opportunities or generate 53.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.7%
Values	Daily Returns

Oil Gas Ultrasector  vs.  Hartford Growth Opportunities

Oil Gas Ultrasector

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oil Gas Ultrasector 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 February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Hartford Growth Oppo

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Growth Opportunities are ranked lower than 10 (%) 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 Oil Gas and Hartford Growth

The main advantage of trading using opposite Oil Gas and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas 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 Oil Gas Ultrasector 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.