Correlation Between Fidelity New and The Hartford

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

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

Diversification Opportunities for Fidelity New and The Hartford

0.94

Correlation Coefficient

Fidelity New  The Hartford

Almost no diversification

The 3 months correlation between Fidelity and The is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Millennium and The Hartford Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Dividend and Fidelity New 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 Fidelity New Millennium 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 Dividend has no effect on the direction of Fidelity New i.e., Fidelity New and The Hartford go up and down completely randomly.

Pair Corralation between Fidelity New and The Hartford

Assuming the 90 days horizon Fidelity New Millennium is expected to generate 1.36 times more return on investment than The Hartford. However, Fidelity New is 1.36 times more volatile than The Hartford Dividend. It trades about 0.31 of its potential returns per unit of risk. The Hartford Dividend is currently generating about 0.14 per unit of risk. If you would invest  5,598  in Fidelity New Millennium on September 10, 2024 and sell it today you would earn a total of  820.00  from holding Fidelity New Millennium or generate 14.65% return on investment over 90 days.

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

Fidelity New Millennium  vs.  The Hartford Dividend

Fidelity New Millennium

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity New Millennium are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Fidelity New showed solid returns over the last few months and may actually be approaching a breakup point.

Hartford Dividend

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Dividend are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward 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 Fidelity New and The Hartford

The main advantage of trading using opposite Fidelity New and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New 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 Fidelity New Millennium and The Hartford Dividend 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.