Correlation Between Hartford International and The Hartford

Can any of the company-specific risk be diversified away by investing in both Hartford International 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 International 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 International and The Hartford Healthcare, you can compare the effects of market volatilities on Hartford International 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 International with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford International and The Hartford.

Diversification Opportunities for Hartford International and The Hartford

0.77

Correlation Coefficient

Hartford International  The Hartford

Poor diversification

The 3 months correlation between Hartford and The is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford International 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 International 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 International 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 International i.e., Hartford International and The Hartford go up and down completely randomly.

Pair Corralation between Hartford International and The Hartford

Assuming the 90 days horizon The Hartford International is expected to under-perform the The Hartford. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Hartford International is 1.27 times less risky than The Hartford. The mutual fund trades about -0.1 of its potential returns per unit of risk. The The Hartford Healthcare is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4,839  in The Hartford Healthcare on September 5, 2024 and sell it today you would lose (4.00) from holding The Hartford Healthcare or give up 0.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

The Hartford International  vs.  The Hartford Healthcare

Hartford International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hartford International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 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 Hartford International and The Hartford

The main advantage of trading using opposite Hartford International and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford International 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 International 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.