Correlation Between Hartford Emerging and Johcm Emerging

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

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

Diversification Opportunities for Hartford Emerging and Johcm Emerging

-0.24

Correlation Coefficient

Hartford Emerging  Johcm Emerging

Very good diversification

The 3 months correlation between Hartford and Johcm is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Emerging and Johcm Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm Emerging Markets and Hartford Emerging 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 Emerging are associated (or correlated) with Johcm Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm Emerging Markets has no effect on the direction of Hartford Emerging i.e., Hartford Emerging and Johcm Emerging go up and down completely randomly.

Pair Corralation between Hartford Emerging and Johcm Emerging

Assuming the 90 days horizon The Hartford Emerging is expected to generate 0.43 times more return on investment than Johcm Emerging. However, The Hartford Emerging is 2.35 times less risky than Johcm Emerging. It trades about 0.12 of its potential returns per unit of risk. Johcm Emerging Markets is currently generating about -0.04 per unit of risk. If you would invest  418.00  in The Hartford Emerging on December 27, 2024 and sell it today you would earn a total of  13.00  from holding The Hartford Emerging or generate 3.11% return on investment over 90 days.

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

The Hartford Emerging  vs.  Johcm Emerging Markets

Hartford Emerging

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Emerging are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hartford Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Johcm Emerging Markets

Risk-Adjusted Performance

Very Weak

Over the last 90 days Johcm Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Johcm Emerging 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 Emerging and Johcm Emerging

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

The idea behind The Hartford Emerging and Johcm Emerging Markets 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..