Correlation Between Hartford Dividend and Hartford Growth

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

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

Diversification Opportunities for Hartford Dividend and Hartford Growth

-0.41

Correlation Coefficient

Hartford Dividend  Hartford Growth

Very good diversification

The 3 months correlation between Hartford and Hartford is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Dividend and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Hartford Dividend 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 Dividend 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 Hartford Dividend i.e., Hartford Dividend and Hartford Growth go up and down completely randomly.

Pair Corralation between Hartford Dividend and Hartford Growth

Assuming the 90 days horizon The Hartford Dividend is expected to under-perform the Hartford Growth. In addition to that, Hartford Dividend is 1.06 times more volatile than The Hartford Growth. It trades about -0.12 of its total potential returns per unit of risk. The Hartford Growth is currently generating about 0.19 per unit of volatility. If you would invest  6,098  in The Hartford Growth on September 27, 2024 and sell it today you would earn a total of  854.00  from holding The Hartford Growth or generate 14.0% return on investment over 90 days.

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

The Hartford Dividend  vs.  The Hartford Growth

Hartford Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford Dividend 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.

Hartford Growth

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Hartford Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hartford Dividend and Hartford Growth

The main advantage of trading using opposite Hartford Dividend and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Dividend 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 The Hartford Dividend 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.