Correlation Between Hartford Global and The Hartford

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

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

Diversification Opportunities for Hartford Global and The Hartford

0.97

Correlation Coefficient

Hartford Global  The Hartford

Almost no diversification

The 3 months correlation between Hartford and The is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Global and The Hartford Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Healthcare and Hartford Global 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 The Hartford Global 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 The Hartford Healthcare has no effect on the direction of Hartford Global i.e., Hartford Global and The Hartford go up and down completely randomly.

Pair Corralation between Hartford Global and The Hartford

Assuming the 90 days horizon The Hartford Global is expected to generate 1.0 times more return on investment than The Hartford. However, The Hartford Global is 1.0 times less risky than The Hartford. It trades about -0.13 of its potential returns per unit of risk. The Hartford Healthcare is currently generating about -0.13 per unit of risk. If you would invest  4,582  in The Hartford Global on September 5, 2024 and sell it today you would lose (302.00) from holding The Hartford Global or give up 6.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

The Hartford Global  vs.  The Hartford Healthcare

Hartford Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

The Hartford Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford Healthcare has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Hartford Global and The Hartford

The main advantage of trading using opposite Hartford Global and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Global 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 The Hartford Global and The Hartford Healthcare 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 Global Correlations module to find global opportunities by holding instruments from different markets.