Correlation Between Hartford Schroders and Hartford Small

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

By analyzing existing cross correlation between Hartford Schroders Emerging and Hartford Small Cap, you can compare the effects of market volatilities on Hartford Schroders and Hartford Small 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 Schroders with a short position of Hartford Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Schroders and Hartford Small.

Diversification Opportunities for Hartford Schroders and Hartford Small

-0.27

Correlation Coefficient

Hartford Schroders  Hartford Small

Very good diversification

The 3 months correlation between Hartford and Hartford is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Schroders Emerging and Hartford Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small Cap and Hartford Schroders 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 Schroders Emerging are associated (or correlated) with Hartford Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small Cap has no effect on the direction of Hartford Schroders i.e., Hartford Schroders and Hartford Small go up and down completely randomly.

Pair Corralation between Hartford Schroders and Hartford Small

Assuming the 90 days horizon Hartford Schroders Emerging is expected to under-perform the Hartford Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Hartford Schroders Emerging is 1.84 times less risky than Hartford Small. The mutual fund trades about -0.19 of its potential returns per unit of risk. The Hartford Small Cap is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,250  in Hartford Small Cap on October 7, 2024 and sell it today you would earn a total of  19.00  from holding Hartford Small Cap or generate 1.52% return on investment over 90 days.

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

Hartford Schroders Emerging  vs.  Hartford Small Cap

Hartford Schroders

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hartford Schroders Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Hartford Small Cap

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Small Cap are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Hartford Small 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 Schroders and Hartford Small

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

The idea behind Hartford Schroders Emerging and Hartford Small Cap 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.