Correlation Between Ridgeworth Seix and The Hartford

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

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

Diversification Opportunities for Ridgeworth Seix and The Hartford

-0.04

Correlation Coefficient

Ridgeworth Seix  The Hartford

Good diversification

The 3 months correlation between Ridgeworth and The is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ridgeworth Seix Government and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small and Ridgeworth Seix 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 Ridgeworth Seix Government 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 Small has no effect on the direction of Ridgeworth Seix i.e., Ridgeworth Seix and The Hartford go up and down completely randomly.

Pair Corralation between Ridgeworth Seix and The Hartford

Assuming the 90 days horizon Ridgeworth Seix is expected to generate 4.05 times less return on investment than The Hartford. But when comparing it to its historical volatility, Ridgeworth Seix Government is 11.69 times less risky than The Hartford. It trades about 0.2 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,889  in The Hartford Small on October 25, 2024 and sell it today you would earn a total of  145.00  from holding The Hartford Small or generate 5.02% return on investment over 90 days.

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

Ridgeworth Seix Government  vs.  The Hartford Small

Ridgeworth Seix Gove

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ridgeworth Seix Government are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ridgeworth Seix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hartford Small

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Small are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, The Hartford is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ridgeworth Seix and The Hartford

The main advantage of trading using opposite Ridgeworth Seix and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ridgeworth Seix 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 Ridgeworth Seix Government and The Hartford Small 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.