Correlation Between The Hartford and Great-west Goldman

Can any of the company-specific risk be diversified away by investing in both The Hartford and Great-west Goldman 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 Great-west Goldman 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 Great West Goldman Sachs, you can compare the effects of market volatilities on The Hartford and Great-west Goldman 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 Great-west Goldman. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Great-west Goldman.

Diversification Opportunities for The Hartford and Great-west Goldman

-0.51

Correlation Coefficient

The Hartford  Great-west Goldman

Excellent diversification

The 3 months correlation between The and Great-west is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Inflation and Great West Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Goldman 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 Great-west Goldman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Goldman has no effect on the direction of The Hartford i.e., The Hartford and Great-west Goldman go up and down completely randomly.

Pair Corralation between The Hartford and Great-west Goldman

Assuming the 90 days horizon The Hartford Inflation is expected to under-perform the Great-west Goldman. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Hartford Inflation is 3.69 times less risky than Great-west Goldman. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Great West Goldman Sachs is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  940.00  in Great West Goldman Sachs on August 31, 2024 and sell it today you would earn a total of  80.00  from holding Great West Goldman Sachs or generate 8.51% return on investment over 90 days.

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

The Hartford Inflation  vs.  Great West Goldman Sachs

The Hartford Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford Inflation has generated negative risk-adjusted returns adding no value to fund investors. 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.

Great West Goldman

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Goldman Sachs are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking indicators, Great-west Goldman may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with The Hartford and Great-west Goldman

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

The idea behind The Hartford Inflation and Great West Goldman Sachs 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.