Correlation Between City National and Hartford Balanced

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

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

Diversification Opportunities for City National and Hartford Balanced

-0.01

Correlation Coefficient

City National  Hartford Balanced

Good diversification

The 3 months correlation between City and Hartford is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and The Hartford Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Balanced and City National 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 City National Rochdale are associated (or correlated) with Hartford Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Balanced has no effect on the direction of City National i.e., City National and Hartford Balanced go up and down completely randomly.

Pair Corralation between City National and Hartford Balanced

Assuming the 90 days horizon City National Rochdale is expected to generate 0.25 times more return on investment than Hartford Balanced. However, City National Rochdale is 3.96 times less risky than Hartford Balanced. It trades about 0.18 of its potential returns per unit of risk. The Hartford Balanced is currently generating about -0.05 per unit of risk. If you would invest  1,964  in City National Rochdale on September 17, 2024 and sell it today you would earn a total of  18.00  from holding City National Rochdale or generate 0.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

City National Rochdale  vs.  The Hartford Balanced

City National Rochdale

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in City National Rochdale are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, City National is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hartford Balanced

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with City National and Hartford Balanced

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

The idea behind City National Rochdale and The Hartford Balanced 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.