Correlation Between Hartford Balanced and Pacific Funds

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

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

Diversification Opportunities for Hartford Balanced and Pacific Funds

0.39

Correlation Coefficient

Hartford Balanced  Pacific Funds

Weak diversification

The 3 months correlation between Hartford and Pacific is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Balanced and Pacific Funds E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds E and Hartford Balanced 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 The Hartford Balanced are associated (or correlated) with Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds E has no effect on the direction of Hartford Balanced i.e., Hartford Balanced and Pacific Funds go up and down completely randomly.

Pair Corralation between Hartford Balanced and Pacific Funds

Assuming the 90 days horizon The Hartford Balanced is expected to generate 1.13 times more return on investment than Pacific Funds. However, Hartford Balanced is 1.13 times more volatile than Pacific Funds E. It trades about -0.03 of its potential returns per unit of risk. Pacific Funds E is currently generating about -0.14 per unit of risk. If you would invest  1,517  in The Hartford Balanced on September 16, 2024 and sell it today you would lose (10.00) from holding The Hartford Balanced or give up 0.66% of portfolio value over 90 days.

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

The Hartford Balanced  vs.  Pacific Funds E

Hartford Balanced

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford Balanced has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Hartford Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pacific Funds E

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacific Funds E has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Pacific Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hartford Balanced and Pacific Funds

The main advantage of trading using opposite Hartford Balanced and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Balanced position performs unexpectedly, Pacific Funds 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 Pacific Funds will offset losses from the drop in Pacific Funds' long position.

The idea behind The Hartford Balanced and Pacific Funds E 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.