Correlation Between Pia High and The Hartford

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

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

Diversification Opportunities for Pia High and The Hartford

0.01

Correlation Coefficient

Pia High  The Hartford

Significant diversification

The 3 months correlation between Pia and The is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Pia High Yield and The Hartford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Interna and Pia High 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 Pia High Yield 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 Pia High i.e., Pia High and The Hartford go up and down completely randomly.

Pair Corralation between Pia High and The Hartford

Assuming the 90 days horizon Pia High Yield is expected to under-perform the The Hartford. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pia High Yield is 4.43 times less risky than The Hartford. The mutual fund trades about -0.02 of its potential returns per unit of risk. The The Hartford International is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  1,755  in The Hartford International on December 19, 2024 and sell it today you would earn a total of  313.00  from holding The Hartford International or generate 17.83% return on investment over 90 days.

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

Pia High Yield  vs.  The Hartford International

Pia High Yield

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pia High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pia High 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

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford International are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, The Hartford showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pia High and The Hartford

The main advantage of trading using opposite Pia High and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pia High 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 Pia High Yield 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.