Correlation Between Eagle Mid and The Hartford

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

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

Diversification Opportunities for Eagle Mid and The Hartford

0.48

Correlation Coefficient

Eagle Mid  The Hartford

Very weak diversification

The 3 months correlation between Eagle and The is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Mid Cap and The Hartford Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Short and Eagle Mid 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 Eagle Mid 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 Short has no effect on the direction of Eagle Mid i.e., Eagle Mid and The Hartford go up and down completely randomly.

Pair Corralation between Eagle Mid and The Hartford

Assuming the 90 days horizon Eagle Mid Cap is expected to under-perform the The Hartford. In addition to that, Eagle Mid is 9.38 times more volatile than The Hartford Short. It trades about -0.01 of its total potential returns per unit of risk. The Hartford Short is currently generating about 0.18 per unit of volatility. If you would invest  876.00  in The Hartford Short on October 4, 2024 and sell it today you would earn a total of  85.00  from holding The Hartford Short or generate 9.7% return on investment over 90 days.

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

Eagle Mid Cap  vs.  The Hartford Short

Eagle Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eagle Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Hartford Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford Short has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental 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 Eagle Mid and The Hartford

The main advantage of trading using opposite Eagle Mid and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Mid 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 Eagle Mid Cap and The Hartford Short 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.