Correlation Between Hartford Growth and Total Income

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

Diversification Opportunities for Hartford Growth and Total Income

-0.78

Correlation Coefficient

Hartford Growth  Total Income

Pay attention - limited upside

The 3 months correlation between Hartford and Total is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Growth and Total Income Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Income Real 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 Total Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Income Real has no effect on the direction of Hartford Growth i.e., Hartford Growth and Total Income go up and down completely randomly.

Pair Corralation between Hartford Growth and Total Income

Assuming the 90 days horizon The Hartford Growth is expected to generate 4.0 times more return on investment than Total Income. However, Hartford Growth is 4.0 times more volatile than Total Income Real. It trades about 0.17 of its potential returns per unit of risk. Total Income Real is currently generating about -0.29 per unit of risk. If you would invest  6,533  in The Hartford Growth on September 27, 2024 and sell it today you would earn a total of  302.00  from holding The Hartford Growth or generate 4.62% return on investment over 90 days.

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

The Hartford Growth  vs.  Total Income Real

Hartford Growth

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hartford Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Total Income Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Total Income Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Total Income 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 Total Income

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

The idea behind The Hartford Growth and Total Income Real 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.