Correlation Between Mid Cap and Hartford Global

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

By analyzing existing cross correlation between Mid Cap 15x Strategy and Hartford Global Impact, you can compare the effects of market volatilities on Mid Cap and Hartford Global 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 Mid Cap with a short position of Hartford Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Hartford Global.

Diversification Opportunities for Mid Cap and Hartford Global

0.43

Correlation Coefficient

Mid Cap  Hartford Global

Very weak diversification

The 3 months correlation between Mid and Hartford is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and Hartford Global Impact in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Global Impact and Mid Cap 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 Mid Cap 15x Strategy are associated (or correlated) with Hartford Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Global Impact has no effect on the direction of Mid Cap i.e., Mid Cap and Hartford Global go up and down completely randomly.

Pair Corralation between Mid Cap and Hartford Global

Assuming the 90 days horizon Mid Cap 15x Strategy is expected to generate 2.06 times more return on investment than Hartford Global. However, Mid Cap is 2.06 times more volatile than Hartford Global Impact. It trades about 0.04 of its potential returns per unit of risk. Hartford Global Impact is currently generating about 0.05 per unit of risk. If you would invest  12,378  in Mid Cap 15x Strategy on September 22, 2024 and sell it today you would earn a total of  802.00  from holding Mid Cap 15x Strategy or generate 6.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.22%
Values	Daily Returns

Mid Cap 15x Strategy  vs.  Hartford Global Impact

Mid Cap 15x

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mid Cap 15x Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Mid Cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hartford Global Impact

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mid Cap and Hartford Global

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

The idea behind Mid Cap 15x Strategy and Hartford Global Impact 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.