Correlation Between The Hartford and Aberdeen

Can any of the company-specific risk be diversified away by investing in both The Hartford and Aberdeen 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 Aberdeen 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 Aberdeen Eq Long Short, you can compare the effects of market volatilities on The Hartford and Aberdeen 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 Aberdeen. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Aberdeen.

Diversification Opportunities for The Hartford and Aberdeen

-0.46

Correlation Coefficient

The Hartford  Aberdeen

Very good diversification

The 3 months correlation between The and Aberdeen is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Midcap and Aberdeen Eq Long Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Eq Long 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 Aberdeen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Eq Long has no effect on the direction of The Hartford i.e., The Hartford and Aberdeen go up and down completely randomly.

Pair Corralation between The Hartford and Aberdeen

If you would invest  0.00  in Aberdeen Eq Long Short on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Aberdeen Eq Long Short or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.64%
Values	Daily Returns

The Hartford Midcap  vs.  Aberdeen Eq Long Short

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.

Aberdeen Eq Long

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aberdeen Eq Long Short has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Aberdeen 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 Aberdeen

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

The idea behind The Hartford Midcap and Aberdeen Eq Long 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 CEOs Directory module to screen CEOs from public companies around the world.