Correlation Between Hartford International and Hartford Small

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

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

Diversification Opportunities for Hartford International and Hartford Small

-0.06

Correlation Coefficient

Hartford International  Hartford Small

Good diversification

The 3 months correlation between Hartford and Hartford is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford International 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 International 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 International 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 International i.e., Hartford International and Hartford Small go up and down completely randomly.

Pair Corralation between Hartford International and Hartford Small

Assuming the 90 days horizon The Hartford International is expected to generate 0.69 times more return on investment than Hartford Small. However, The Hartford International is 1.44 times less risky than Hartford Small. It trades about -0.22 of its potential returns per unit of risk. Hartford Small Cap is currently generating about -0.19 per unit of risk. If you would invest  1,908  in The Hartford International on October 7, 2024 and sell it today you would lose (144.00) from holding The Hartford International or give up 7.55% of portfolio value over 90 days.

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

The Hartford International  vs.  Hartford Small Cap

Hartford International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental 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 International and Hartford Small

The main advantage of trading using opposite Hartford International and Hartford Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford International 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 The Hartford International 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.