Correlation Between 6 Meridian and Hartford Multifactor

Can any of the company-specific risk be diversified away by investing in both 6 Meridian and Hartford Multifactor 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 6 Meridian and Hartford Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 6 Meridian Small and Hartford Multifactor Small, you can compare the effects of market volatilities on 6 Meridian and Hartford Multifactor 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 6 Meridian with a short position of Hartford Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of 6 Meridian and Hartford Multifactor.

Diversification Opportunities for 6 Meridian and Hartford Multifactor

0.99

Correlation Coefficient

6 Meridian  Hartford Multifactor

No risk reduction

The 3 months correlation between SIXS and Hartford is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding 6 Meridian Small and Hartford Multifactor Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Multifactor and 6 Meridian 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 6 Meridian Small are associated (or correlated) with Hartford Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Multifactor has no effect on the direction of 6 Meridian i.e., 6 Meridian and Hartford Multifactor go up and down completely randomly.

Pair Corralation between 6 Meridian and Hartford Multifactor

Given the investment horizon of 90 days 6 Meridian Small is expected to generate 0.9 times more return on investment than Hartford Multifactor. However, 6 Meridian Small is 1.11 times less risky than Hartford Multifactor. It trades about -0.2 of its potential returns per unit of risk. Hartford Multifactor Small is currently generating about -0.28 per unit of risk. If you would invest  5,149  in 6 Meridian Small on October 8, 2024 and sell it today you would lose (196.00) from holding 6 Meridian Small or give up 3.81% of portfolio value over 90 days.

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

6 Meridian Small  vs.  Hartford Multifactor Small

6 Meridian Small

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 6 Meridian Small are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, 6 Meridian is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Hartford Multifactor

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Multifactor Small are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Hartford Multifactor is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with 6 Meridian and Hartford Multifactor

The main advantage of trading using opposite 6 Meridian and Hartford Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 6 Meridian position performs unexpectedly, Hartford Multifactor 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 Multifactor will offset losses from the drop in Hartford Multifactor's long position.

The idea behind 6 Meridian Small and Hartford Multifactor 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.