Correlation Between Ultra Short and Hartford Growth

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

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

Diversification Opportunities for Ultra Short and Hartford Growth

0.82

Correlation Coefficient

Ultra Short  Hartford Growth

Very poor diversification

The 3 months correlation between Ultra and Hartford is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Short Fixed Income and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Ultra Short 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 Ultra Short Fixed Income are associated (or correlated) with Hartford Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Ultra Short i.e., Ultra Short and Hartford Growth go up and down completely randomly.

Pair Corralation between Ultra Short and Hartford Growth

If you would invest  6,872  in The Hartford Growth on October 24, 2024 and sell it today you would earn a total of  15.00  from holding The Hartford Growth or generate 0.22% return on investment over 90 days.

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

Ultra Short Fixed Income  vs.  The Hartford Growth

Ultra Short Fixed

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Short Fixed Income are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Ultra Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hartford Growth

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Hartford Growth may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ultra Short and Hartford Growth

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

The idea behind Ultra Short Fixed Income and The Hartford Growth 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.

Check out your portfolio center.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.