Correlation Between Hartford Disciplined and The Hartford

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

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

Diversification Opportunities for Hartford Disciplined and The Hartford

-0.55

Correlation Coefficient

Hartford Disciplined  The Hartford

Excellent diversification

The 3 months correlation between Hartford and The is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Disciplined Equity and The Hartford Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Total and Hartford Disciplined 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 Disciplined Equity are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Total has no effect on the direction of Hartford Disciplined i.e., Hartford Disciplined and The Hartford go up and down completely randomly.

Pair Corralation between Hartford Disciplined and The Hartford

Assuming the 90 days horizon Hartford Disciplined Equity is expected to under-perform the The Hartford. In addition to that, Hartford Disciplined is 3.42 times more volatile than The Hartford Total. It trades about -0.09 of its total potential returns per unit of risk. The Hartford Total is currently generating about 0.13 per unit of volatility. If you would invest  894.00  in The Hartford Total on December 30, 2024 and sell it today you would earn a total of  20.00  from holding The Hartford Total or generate 2.24% return on investment over 90 days.

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

Hartford Disciplined Equity  vs.  The Hartford Total

Hartford Disciplined

Risk-Adjusted Performance

Very Weak

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

Hartford Total

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Total are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, The Hartford 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 Disciplined and The Hartford

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

The idea behind Hartford Disciplined Equity and The Hartford Total 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.