Correlation Between Hartford Multifactor and WisdomTree International

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

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

Diversification Opportunities for Hartford Multifactor and WisdomTree International

0.92

Correlation Coefficient

Hartford Multifactor  WisdomTree International

Almost no diversification

The 3 months correlation between Hartford and WisdomTree is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Multifactor Developed and WisdomTree International Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and Hartford Multifactor 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 Multifactor Developed are associated (or correlated) with WisdomTree International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree International has no effect on the direction of Hartford Multifactor i.e., Hartford Multifactor and WisdomTree International go up and down completely randomly.

Pair Corralation between Hartford Multifactor and WisdomTree International

Given the investment horizon of 90 days Hartford Multifactor Developed is expected to generate 1.13 times more return on investment than WisdomTree International. However, Hartford Multifactor is 1.13 times more volatile than WisdomTree International Multifactor. It trades about 0.12 of its potential returns per unit of risk. WisdomTree International Multifactor is currently generating about 0.04 per unit of risk. If you would invest  2,954  in Hartford Multifactor Developed on September 4, 2024 and sell it today you would earn a total of  46.00  from holding Hartford Multifactor Developed or generate 1.56% return on investment over 90 days.

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

Hartford Multifactor Developed  vs.  WisdomTree International Multi

Hartford Multifactor

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Multifactor Developed are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Hartford Multifactor is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

WisdomTree International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WisdomTree International Multifactor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, WisdomTree International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hartford Multifactor and WisdomTree International

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

The idea behind Hartford Multifactor Developed and WisdomTree International Multifactor 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.