Correlation Between The Hartford and Aamg Funds

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

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

Diversification Opportunities for The Hartford and Aamg Funds

0.94

Correlation Coefficient

The Hartford  Aamg Funds

Almost no diversification

The 3 months correlation between The and Aamg is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Midcap and Aamg Funds Iv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aamg Funds Iv and The Hartford 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 Midcap are associated (or correlated) with Aamg Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aamg Funds Iv has no effect on the direction of The Hartford i.e., The Hartford and Aamg Funds go up and down completely randomly.

Pair Corralation between The Hartford and Aamg Funds

Assuming the 90 days horizon The Hartford Midcap is expected to under-perform the Aamg Funds. In addition to that, The Hartford is 1.29 times more volatile than Aamg Funds Iv. It trades about -0.08 of its total potential returns per unit of risk. Aamg Funds Iv is currently generating about -0.08 per unit of volatility. If you would invest  1,819  in Aamg Funds Iv on December 27, 2024 and sell it today you would lose (106.00) from holding Aamg Funds Iv or give up 5.83% of portfolio value over 90 days.

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

The Hartford Midcap  vs.  Aamg Funds Iv

Hartford Midcap

Risk-Adjusted Performance

Very Weak

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

Aamg Funds Iv

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aamg Funds Iv has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Aamg 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 The Hartford and Aamg Funds

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

The idea behind The Hartford Midcap and Aamg Funds Iv 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.