Correlation Between Hartford Small and Fisher Investments

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

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

Diversification Opportunities for Hartford Small and Fisher Investments

0.98

Correlation Coefficient

Hartford Small  Fisher Investments

Almost no diversification

The 3 months correlation between Hartford and Fisher is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Small and Fisher Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Investments and Hartford Small 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 Small are associated (or correlated) with Fisher Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Investments has no effect on the direction of Hartford Small i.e., Hartford Small and Fisher Investments go up and down completely randomly.

Pair Corralation between Hartford Small and Fisher Investments

Assuming the 90 days horizon The Hartford Small is expected to generate 0.88 times more return on investment than Fisher Investments. However, The Hartford Small is 1.14 times less risky than Fisher Investments. It trades about 0.06 of its potential returns per unit of risk. Fisher Small Cap is currently generating about 0.02 per unit of risk. If you would invest  2,670  in The Hartford Small on October 9, 2024 and sell it today you would earn a total of  311.00  from holding The Hartford Small or generate 11.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.39%
Values	Daily Returns

The Hartford Small  vs.  Fisher Small Cap

Hartford Small

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Small are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hartford Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fisher Investments

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Small Cap are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Fisher Investments 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 Small and Fisher Investments

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

The idea behind The Hartford Small and Fisher Small Cap 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.