Correlation Between Hartford Financial and Saul Centers

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

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

Diversification Opportunities for Hartford Financial and Saul Centers

-0.21

Correlation Coefficient

Hartford Financial  Saul Centers

Very good diversification

The 3 months correlation between Hartford and Saul is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Financial and Saul Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saul Centers and Hartford Financial 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 The Hartford Financial are associated (or correlated) with Saul Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saul Centers has no effect on the direction of Hartford Financial i.e., Hartford Financial and Saul Centers go up and down completely randomly.

Pair Corralation between Hartford Financial and Saul Centers

Assuming the 90 days trading horizon The Hartford Financial is expected to generate 0.27 times more return on investment than Saul Centers. However, The Hartford Financial is 3.77 times less risky than Saul Centers. It trades about 0.01 of its potential returns per unit of risk. Saul Centers is currently generating about -0.15 per unit of risk. If you would invest  2,514  in The Hartford Financial on September 24, 2024 and sell it today you would earn a total of  3.00  from holding The Hartford Financial or generate 0.12% return on investment over 90 days.

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

The Hartford Financial  vs.  Saul Centers

The Hartford Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Hartford Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Saul Centers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saul Centers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Saul Centers is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hartford Financial and Saul Centers

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

The idea behind The Hartford Financial and Saul Centers 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.