Correlation Between The Hartford and Archer Multi

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

By analyzing existing cross correlation between The Hartford Healthcare and Archer Multi Cap, you can compare the effects of market volatilities on The Hartford and Archer Multi 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 Archer Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Archer Multi.

Diversification Opportunities for The Hartford and Archer Multi

0.36

Correlation Coefficient

The Hartford  Archer Multi

Weak diversification

The 3 months correlation between The and Archer is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Healthcare and Archer Multi Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Multi Cap 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 Healthcare are associated (or correlated) with Archer Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Multi Cap has no effect on the direction of The Hartford i.e., The Hartford and Archer Multi go up and down completely randomly.

Pair Corralation between The Hartford and Archer Multi

Assuming the 90 days horizon The Hartford Healthcare is expected to generate 0.76 times more return on investment than Archer Multi. However, The Hartford Healthcare is 1.31 times less risky than Archer Multi. It trades about 0.03 of its potential returns per unit of risk. Archer Multi Cap is currently generating about -0.14 per unit of risk. If you would invest  4,288  in The Hartford Healthcare on December 19, 2024 and sell it today you would earn a total of  51.00  from holding The Hartford Healthcare or generate 1.19% return on investment over 90 days.

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

The Hartford Healthcare  vs.  Archer Multi Cap

The Hartford Healthcare

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Healthcare are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, The Hartford is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Archer Multi Cap

Risk-Adjusted Performance

Very Weak

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

Pair Trading with The Hartford and Archer Multi

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

The idea behind The Hartford Healthcare and Archer Multi Cap 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.