Correlation Between The Hartford and Hartford Growth

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

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

Diversification Opportunities for The Hartford and Hartford Growth

-0.06

Correlation Coefficient

The Hartford  Hartford Growth

Good diversification

The 3 months correlation between The and Hartford is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Inflation and Hartford Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth Oppo 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 Inflation 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 Oppo has no effect on the direction of The Hartford i.e., The Hartford and Hartford Growth go up and down completely randomly.

Pair Corralation between The Hartford and Hartford Growth

Assuming the 90 days horizon The Hartford Inflation is expected to generate 0.13 times more return on investment than Hartford Growth. However, The Hartford Inflation is 7.76 times less risky than Hartford Growth. It trades about 0.15 of its potential returns per unit of risk. Hartford Growth Opportunities is currently generating about -0.02 per unit of risk. If you would invest  999.00  in The Hartford Inflation on December 1, 2024 and sell it today you would earn a total of  17.00  from holding The Hartford Inflation or generate 1.7% return on investment over 90 days.

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

The Hartford Inflation  vs.  Hartford Growth Opportunities

The Hartford Inflation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Inflation are ranked lower than 12 (%) 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.

Hartford Growth Oppo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hartford Growth Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hartford Growth 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 Hartford Growth

The main advantage of trading using opposite The Hartford and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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 The Hartford Inflation and Hartford Growth Opportunities 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.