Correlation Between The Hartford and Bridge Builder
Can any of the company-specific risk be diversified away by investing in both The Hartford and Bridge Builder 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 Bridge Builder 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 Bridge Builder Smallmid, you can compare the effects of market volatilities on The Hartford and Bridge Builder 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 Bridge Builder. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Bridge Builder.
Diversification Opportunities for The Hartford and Bridge Builder
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between The and Bridge is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Equity and Bridge Builder Smallmid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridge Builder Smallmid 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 Equity are associated (or correlated) with Bridge Builder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridge Builder Smallmid has no effect on the direction of The Hartford i.e., The Hartford and Bridge Builder go up and down completely randomly.
Pair Corralation between The Hartford and Bridge Builder
Assuming the 90 days horizon The Hartford Equity is expected to generate 0.98 times more return on investment than Bridge Builder. However, The Hartford Equity is 1.02 times less risky than Bridge Builder. It trades about -0.11 of its potential returns per unit of risk. Bridge Builder Smallmid is currently generating about -0.15 per unit of risk. If you would invest 2,255 in The Hartford Equity on December 3, 2024 and sell it today you would lose (170.00) from holding The Hartford Equity or give up 7.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
The Hartford Equity vs. Bridge Builder Smallmid
Performance |
Timeline |
Hartford Equity |
Bridge Builder Smallmid |
The Hartford and Bridge Builder Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with The Hartford and Bridge Builder
The main advantage of trading using opposite The Hartford and Bridge Builder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Bridge Builder 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 Bridge Builder will offset losses from the drop in Bridge Builder's long position.The Hartford vs. The Hartford Dividend | The Hartford vs. The Hartford Total | The Hartford vs. The Hartford International | The Hartford vs. The Hartford Midcap |
Bridge Builder vs. Principal Lifetime Hybrid | Bridge Builder vs. Massmutual Premier Diversified | Bridge Builder vs. Lord Abbett Diversified | Bridge Builder vs. Blackrock Diversified Fixed |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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