Correlation Between Invesco Global and The Hartford

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

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

Diversification Opportunities for Invesco Global and The Hartford

-0.7

Correlation Coefficient

Invesco Global  The Hartford

Excellent diversification

The 3 months correlation between Invesco and The is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Health and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Invesco Global 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 Invesco Global Health 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 Growth has no effect on the direction of Invesco Global i.e., Invesco Global and The Hartford go up and down completely randomly.

Pair Corralation between Invesco Global and The Hartford

Assuming the 90 days horizon Invesco Global is expected to generate 44.97 times less return on investment than The Hartford. But when comparing it to its historical volatility, Invesco Global Health is 1.4 times less risky than The Hartford. It trades about 0.0 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,544  in The Hartford Growth on October 11, 2024 and sell it today you would earn a total of  3,279  from holding The Hartford Growth or generate 92.52% return on investment over 90 days.

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

Invesco Global Health  vs.  The Hartford Growth

Invesco Global Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Global Health 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 fundamental 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

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, The Hartford may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Invesco Global and The Hartford

The main advantage of trading using opposite Invesco Global and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Global 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 Invesco Global Health and The Hartford Growth 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.