Correlation Between The Hartford and The Hartford

Can any of the company-specific risk be diversified away by investing in both The Hartford 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 The Hartford and The Hartford 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 The Hartford Total, you can compare the effects of market volatilities on The Hartford 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 The Hartford with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and The Hartford.

Diversification Opportunities for The Hartford and The Hartford

0.9

Correlation Coefficient

The Hartford  The Hartford

Almost no diversification

The 3 months correlation between The and The is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford International and The Hartford Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Total and The Hartford 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 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 The Hartford i.e., The Hartford and The Hartford go up and down completely randomly.

Pair Corralation between The Hartford and The Hartford

Assuming the 90 days horizon The Hartford International is expected to generate 3.1 times more return on investment than The Hartford. However, The Hartford is 3.1 times more volatile than The Hartford Total. It trades about 0.25 of its potential returns per unit of risk. The Hartford Total is currently generating about 0.13 per unit of risk. If you would invest  1,764  in The Hartford International on December 30, 2024 and sell it today you would earn a total of  244.00  from holding The Hartford International or generate 13.83% return on investment over 90 days.

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

The Hartford International  vs.  The Hartford Total

Hartford Interna

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford International are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, The Hartford showed solid returns over the last few months and may actually be approaching a breakup point.

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 The Hartford and The Hartford

The main advantage of trading using opposite The Hartford and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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 The Hartford International 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.