Correlation Between Hartford Total and VanEck Vectors

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

By analyzing existing cross correlation between Hartford Total Return and VanEck Vectors Moodys, you can compare the effects of market volatilities on Hartford Total and VanEck Vectors 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 Total with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Total and VanEck Vectors.

Diversification Opportunities for Hartford Total and VanEck Vectors

0.95

Correlation Coefficient

Hartford Total  VanEck Vectors

Almost no diversification

The 3 months correlation between Hartford and VanEck is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Total Return and VanEck Vectors Moodys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors Moodys and Hartford Total 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 Total Return are associated (or correlated) with VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors Moodys has no effect on the direction of Hartford Total i.e., Hartford Total and VanEck Vectors go up and down completely randomly.

Pair Corralation between Hartford Total and VanEck Vectors

Given the investment horizon of 90 days Hartford Total Return is expected to generate 0.78 times more return on investment than VanEck Vectors. However, Hartford Total Return is 1.28 times less risky than VanEck Vectors. It trades about -0.44 of its potential returns per unit of risk. VanEck Vectors Moodys is currently generating about -0.44 per unit of risk. If you would invest  3,393  in Hartford Total Return on October 9, 2024 and sell it today you would lose (63.00) from holding Hartford Total Return or give up 1.86% of portfolio value over 90 days.

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

Hartford Total Return  vs.  VanEck Vectors Moodys

Hartford Total Return

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hartford Total Return has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hartford Total is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

VanEck Vectors Moodys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Vectors Moodys has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, VanEck Vectors 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 Total and VanEck Vectors

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

The idea behind Hartford Total Return and VanEck Vectors Moodys 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 Stocks Directory module to find actively traded stocks across global markets.