Correlation Between Dreyfusnewton International and Hartford Growth

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

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

Diversification Opportunities for Dreyfusnewton International and Hartford Growth

-0.58

Correlation Coefficient

Dreyfusnewton International  Hartford Growth

Excellent diversification

The 3 months correlation between Dreyfusnewton and Hartford is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfusnewton International Eq and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Dreyfusnewton International 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 Dreyfusnewton International Equity are associated (or correlated) with Hartford Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Dreyfusnewton International i.e., Dreyfusnewton International and Hartford Growth go up and down completely randomly.

Pair Corralation between Dreyfusnewton International and Hartford Growth

Assuming the 90 days horizon Dreyfusnewton International Equity is expected to under-perform the Hartford Growth. In addition to that, Dreyfusnewton International is 1.52 times more volatile than The Hartford Growth. It trades about -0.03 of its total potential returns per unit of risk. The Hartford Growth is currently generating about 0.13 per unit of volatility. If you would invest  3,779  in The Hartford Growth on September 27, 2024 and sell it today you would earn a total of  4,037  from holding The Hartford Growth or generate 106.83% return on investment over 90 days.

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

Dreyfusnewton International Eq  vs.  The Hartford Growth

Dreyfusnewton International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfusnewton International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Hartford Growth

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hartford Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dreyfusnewton International and Hartford Growth

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

The idea behind Dreyfusnewton International Equity and The Hartford Growth 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..