Correlation Between Leggmason Partners and The Hartford

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

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

Diversification Opportunities for Leggmason Partners and The Hartford

0.0

Correlation Coefficient

Leggmason Partners  The Hartford

Pay attention - limited upside

The 3 months correlation between Leggmason and The is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Leggmason Partners Institution and The Hartford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Interna and Leggmason Partners 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 Leggmason Partners Institutional are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Interna has no effect on the direction of Leggmason Partners i.e., Leggmason Partners and The Hartford go up and down completely randomly.

Pair Corralation between Leggmason Partners and The Hartford

If you would invest  1,744  in The Hartford International on December 30, 2024 and sell it today you would earn a total of  239.00  from holding The Hartford International or generate 13.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Leggmason Partners Institution  vs.  The Hartford International

Leggmason Partners

Risk-Adjusted Performance

Very Weak

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

Hartford Interna

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford International are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, The Hartford showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Leggmason Partners and The Hartford

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

The idea behind Leggmason Partners Institutional and The Hartford International 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.