Correlation Between Hartford Equity and Ab Core

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

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

Diversification Opportunities for Hartford Equity and Ab Core

0.92

Correlation Coefficient

Hartford Equity  Ab Core

Almost no diversification

The 3 months correlation between Hartford and ADGAX is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Equity and Ab E Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab E Opportunities and Hartford Equity 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 Equity are associated (or correlated) with Ab Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab E Opportunities has no effect on the direction of Hartford Equity i.e., Hartford Equity and Ab Core go up and down completely randomly.

Pair Corralation between Hartford Equity and Ab Core

Assuming the 90 days horizon The Hartford Equity is expected to under-perform the Ab Core. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Hartford Equity is 1.31 times less risky than Ab Core. The mutual fund trades about -0.36 of its potential returns per unit of risk. The Ab E Opportunities is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest  2,639  in Ab E Opportunities on October 6, 2024 and sell it today you would lose (304.00) from holding Ab E Opportunities or give up 11.52% of portfolio value over 90 days.

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

The Hartford Equity  vs.  Ab E Opportunities

Hartford Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Ab E Opportunities

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind The Hartford Equity and Ab E 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.