Correlation Between Hartford Global and Hartford E

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

Diversification Opportunities for Hartford Global and Hartford E

0.43

Correlation Coefficient

Hartford Global  Hartford E

Very weak diversification

The 3 months correlation between Hartford and Hartford is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Global Impact and Hartford E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford E Equity 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 Hartford E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford E Equity has no effect on the direction of Hartford Global i.e., Hartford Global and Hartford E go up and down completely randomly.

Pair Corralation between Hartford Global and Hartford E

Assuming the 90 days horizon Hartford Global Impact is expected to generate 0.48 times more return on investment than Hartford E. However, Hartford Global Impact is 2.07 times less risky than Hartford E. It trades about -0.15 of its potential returns per unit of risk. Hartford E Equity is currently generating about -0.21 per unit of risk. If you would invest  1,595  in Hartford Global Impact on September 23, 2024 and sell it today you would lose (41.00) from holding Hartford Global Impact or give up 2.57% of portfolio value over 90 days.

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

Hartford Global Impact  vs.  Hartford E Equity

Hartford Global Impact

Risk-Adjusted Performance

0 of 100

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.

Hartford E Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hartford E Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hartford E 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 Global and Hartford E

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

The idea behind Hartford Global Impact and Hartford E Equity 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.