Correlation Between Fidelity Capital and Hartford Growth

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

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

Diversification Opportunities for Fidelity Capital and Hartford Growth

0.98

Correlation Coefficient

Fidelity Capital  Hartford Growth

Almost no diversification

The 3 months correlation between Fidelity and Hartford is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital 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 Fidelity Capital 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 Fidelity Capital 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 Fidelity Capital i.e., Fidelity Capital and Hartford Growth go up and down completely randomly.

Pair Corralation between Fidelity Capital and Hartford Growth

Assuming the 90 days horizon Fidelity Capital is expected to generate 3.02 times less return on investment than Hartford Growth. But when comparing it to its historical volatility, Fidelity Capital Income is 4.24 times less risky than Hartford Growth. It trades about 0.29 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  5,181  in The Hartford Growth on September 13, 2024 and sell it today you would earn a total of  692.00  from holding The Hartford Growth or generate 13.36% return on investment over 90 days.

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

Fidelity Capital Income  vs.  The Hartford Growth

Fidelity Capital Income

Risk-Adjusted Performance

22 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Capital Income are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Fidelity Capital 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

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hartford Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity Capital and Hartford Growth

The main advantage of trading using opposite Fidelity Capital and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital 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 Fidelity Capital 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.