Correlation Between Hartford Balanced and Hartford Total

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

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

Diversification Opportunities for Hartford Balanced and Hartford Total

0.84

Correlation Coefficient

Hartford Balanced  Hartford Total

Very poor diversification

The 3 months correlation between Hartford and Hartford is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Balanced and The Hartford Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Total and Hartford Balanced 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 Balanced are associated (or correlated) with Hartford Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Total has no effect on the direction of Hartford Balanced i.e., Hartford Balanced and Hartford Total go up and down completely randomly.

Pair Corralation between Hartford Balanced and Hartford Total

Assuming the 90 days horizon The Hartford Balanced is expected to generate 1.08 times more return on investment than Hartford Total. However, Hartford Balanced is 1.08 times more volatile than The Hartford Total. It trades about -0.16 of its potential returns per unit of risk. The Hartford Total is currently generating about -0.17 per unit of risk. If you would invest  1,942  in The Hartford Balanced on October 15, 2024 and sell it today you would lose (60.00) from holding The Hartford Balanced or give up 3.09% of portfolio value over 90 days.

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

The Hartford Balanced  vs.  The Hartford Total

Hartford Balanced

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford Balanced has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hartford Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hartford Total

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford Total has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hartford Total 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 Balanced and Hartford Total

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

The idea behind The Hartford Balanced and The Hartford Total 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.