Correlation Between Hartford Small and Hartford Servative

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

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

Diversification Opportunities for Hartford Small and Hartford Servative

0.29

Correlation Coefficient

Hartford Small  Hartford Servative

Modest diversification

The 3 months correlation between Hartford and Hartford is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Small Pany and The Hartford Servative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Servative and Hartford Small 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 Small Pany are associated (or correlated) with Hartford Servative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Servative has no effect on the direction of Hartford Small i.e., Hartford Small and Hartford Servative go up and down completely randomly.

Pair Corralation between Hartford Small and Hartford Servative

Assuming the 90 days horizon Hartford Small Pany is expected to under-perform the Hartford Servative. In addition to that, Hartford Small is 3.56 times more volatile than The Hartford Servative. It trades about -0.09 of its total potential returns per unit of risk. The Hartford Servative is currently generating about 0.06 per unit of volatility. If you would invest  1,106  in The Hartford Servative on December 20, 2024 and sell it today you would earn a total of  14.00  from holding The Hartford Servative or generate 1.27% return on investment over 90 days.

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

Hartford Small Pany  vs.  The Hartford Servative

Hartford Small Pany

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hartford Small Pany 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.

The Hartford Servative

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Servative are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hartford Servative 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 Small and Hartford Servative

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

The idea behind Hartford Small Pany and The Hartford Servative 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.