Correlation Between Hartford Capital and Hartford Growth

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

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

Diversification Opportunities for Hartford Capital and Hartford Growth

0.9

Correlation Coefficient

Hartford Capital  Hartford Growth

Almost no diversification

The 3 months correlation between Hartford and Hartford is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Capital Appreciation and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Hartford Capital 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 Capital Appreciation are associated (or correlated) with Hartford Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Hartford Capital i.e., Hartford Capital and Hartford Growth go up and down completely randomly.

Pair Corralation between Hartford Capital and Hartford Growth

Assuming the 90 days horizon Hartford Capital is expected to generate 2.65 times less return on investment than Hartford Growth. But when comparing it to its historical volatility, Hartford Capital Appreciation is 1.6 times less risky than Hartford Growth. It trades about 0.05 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,998  in The Hartford Growth on September 23, 2024 and sell it today you would earn a total of  804.00  from holding The Hartford Growth or generate 13.4% return on investment over 90 days.

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

Hartford Capital Appreciation  vs.  The Hartford Growth

Hartford Capital App

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hartford Growth

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Hartford Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hartford Capital and Hartford Growth

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

The idea behind Hartford Capital Appreciation and The Hartford Growth 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.