Correlation Between Hartford Municipal and Trust For

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

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

Diversification Opportunities for Hartford Municipal and Trust For

0.96

Correlation Coefficient

Hartford Municipal  Trust For

Almost no diversification

The 3 months correlation between Hartford and Trust is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Municipal Opportuniti and Trust For Professional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trust For Professional and Hartford Municipal 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 Hartford Municipal Opportunities are associated (or correlated) with Trust For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trust For Professional has no effect on the direction of Hartford Municipal i.e., Hartford Municipal and Trust For go up and down completely randomly.

Pair Corralation between Hartford Municipal and Trust For

Given the investment horizon of 90 days Hartford Municipal Opportunities is expected to under-perform the Trust For. In addition to that, Hartford Municipal is 1.53 times more volatile than Trust For Professional. It trades about -0.01 of its total potential returns per unit of risk. Trust For Professional is currently generating about 0.03 per unit of volatility. If you would invest  2,457  in Trust For Professional on December 29, 2024 and sell it today you would earn a total of  6.00  from holding Trust For Professional or generate 0.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Hartford Municipal Opportuniti  vs.  Trust For Professional

Hartford Municipal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hartford Municipal Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Hartford Municipal is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Trust For Professional

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trust For Professional are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Trust For is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hartford Municipal and Trust For

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

The idea behind Hartford Municipal Opportunities and Trust For Professional 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.