Correlation Between The Hartford and Hartford Moderate

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

Diversification Opportunities for The Hartford and Hartford Moderate

0.77

Correlation Coefficient

The Hartford  Hartford Moderate

Poor diversification

The 3 months correlation between The and HARTFORD is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Growth and Hartford Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Moderate 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 Growth are associated (or correlated) with Hartford Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Moderate has no effect on the direction of The Hartford i.e., The Hartford and Hartford Moderate go up and down completely randomly.

Pair Corralation between The Hartford and Hartford Moderate

Assuming the 90 days horizon The Hartford Growth is expected to generate 2.52 times more return on investment than Hartford Moderate. However, The Hartford is 2.52 times more volatile than Hartford Moderate Allocation. It trades about 0.14 of its potential returns per unit of risk. Hartford Moderate Allocation is currently generating about 0.07 per unit of risk. If you would invest  5,912  in The Hartford Growth on August 30, 2024 and sell it today you would earn a total of  604.00  from holding The Hartford Growth or generate 10.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

The Hartford Growth  vs.  Hartford Moderate Allocation

Hartford Growth

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, The Hartford may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Hartford Moderate

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Moderate Allocation are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Hartford Moderate 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 Hartford Moderate

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

The idea behind The Hartford Growth and Hartford Moderate Allocation 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.