Correlation Between Hartford Global and Flaherty Crumrine

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

By analyzing existing cross correlation between Hartford Global Impact and Flaherty Crumrine Preferred, you can compare the effects of market volatilities on Hartford Global and Flaherty Crumrine 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 Global with a short position of Flaherty Crumrine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Global and Flaherty Crumrine.

Diversification Opportunities for Hartford Global and Flaherty Crumrine

0.06

Correlation Coefficient

Hartford Global  Flaherty Crumrine

Significant diversification

The 3 months correlation between Hartford and Flaherty is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Global Impact and Flaherty Crumrine Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flaherty Crumrine and Hartford Global 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 Hartford Global Impact are associated (or correlated) with Flaherty Crumrine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flaherty Crumrine has no effect on the direction of Hartford Global i.e., Hartford Global and Flaherty Crumrine go up and down completely randomly.

Pair Corralation between Hartford Global and Flaherty Crumrine

Assuming the 90 days horizon Hartford Global Impact is expected to under-perform the Flaherty Crumrine. In addition to that, Hartford Global is 1.72 times more volatile than Flaherty Crumrine Preferred. It trades about -0.01 of its total potential returns per unit of risk. Flaherty Crumrine Preferred is currently generating about 0.15 per unit of volatility. If you would invest  876.00  in Flaherty Crumrine Preferred on December 30, 2024 and sell it today you would earn a total of  43.00  from holding Flaherty Crumrine Preferred or generate 4.91% return on investment over 90 days.

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

Hartford Global Impact  vs.  Flaherty Crumrine Preferred

Hartford Global Impact

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hartford Global Impact has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hartford Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Flaherty Crumrine

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flaherty Crumrine Preferred are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy technical and fundamental indicators, Flaherty Crumrine is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hartford Global and Flaherty Crumrine

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

The idea behind Hartford Global Impact and Flaherty Crumrine Preferred 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.