Correlation Between Hartford Growth and Fidelity Flex

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

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

Diversification Opportunities for Hartford Growth and Fidelity Flex

0.84

Correlation Coefficient

Hartford Growth  Fidelity Flex

Very poor diversification

The 3 months correlation between Hartford and Fidelity is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Growth and Fidelity Flex Servative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Servative and Hartford Growth 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 Growth are associated (or correlated) with Fidelity Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Flex Servative has no effect on the direction of Hartford Growth i.e., Hartford Growth and Fidelity Flex go up and down completely randomly.

Pair Corralation between Hartford Growth and Fidelity Flex

Assuming the 90 days horizon The Hartford Growth is expected to generate 13.39 times more return on investment than Fidelity Flex. However, Hartford Growth is 13.39 times more volatile than Fidelity Flex Servative. It trades about 0.15 of its potential returns per unit of risk. Fidelity Flex Servative is currently generating about 0.22 per unit of risk. If you would invest  6,305  in The Hartford Growth on October 24, 2024 and sell it today you would earn a total of  697.00  from holding The Hartford Growth or generate 11.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.33%
Values	Daily Returns

The Hartford Growth  vs.  Fidelity Flex Servative

Hartford Growth

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Hartford Growth may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fidelity Flex Servative

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Flex Servative are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Fidelity Flex 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 Growth and Fidelity Flex

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

The idea behind The Hartford Growth and Fidelity Flex Servative 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.