Correlation Between Multimedia Portfolio and The Hartford

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

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

Diversification Opportunities for Multimedia Portfolio and The Hartford

0.22

Correlation Coefficient

Multimedia Portfolio  The Hartford

Modest diversification

The 3 months correlation between Multimedia and The is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Multimedia Portfolio Multimedi and The Hartford Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Equity and Multimedia Portfolio 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 Multimedia Portfolio Multimedia 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 Equity has no effect on the direction of Multimedia Portfolio i.e., Multimedia Portfolio and The Hartford go up and down completely randomly.

Pair Corralation between Multimedia Portfolio and The Hartford

Assuming the 90 days horizon Multimedia Portfolio Multimedia is expected to generate 1.46 times more return on investment than The Hartford. However, Multimedia Portfolio is 1.46 times more volatile than The Hartford Equity. It trades about 0.12 of its potential returns per unit of risk. The Hartford Equity is currently generating about 0.04 per unit of risk. If you would invest  6,113  in Multimedia Portfolio Multimedia on December 2, 2024 and sell it today you would earn a total of  5,484  from holding Multimedia Portfolio Multimedia or generate 89.71% return on investment over 90 days.

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

Multimedia Portfolio Multimedi  vs.  The Hartford Equity

Multimedia Portfolio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Multimedia Portfolio Multimedia are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Multimedia Portfolio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hartford Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Hartford Equity 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 Multimedia Portfolio and The Hartford

The main advantage of trading using opposite Multimedia Portfolio and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimedia Portfolio 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 Multimedia Portfolio Multimedia and The Hartford Equity 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.