Correlation Between Walthausen Small and Hartford Schroders

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

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

Diversification Opportunities for Walthausen Small and Hartford Schroders

-0.41

Correlation Coefficient

Walthausen Small  Hartford Schroders

Very good diversification

The 3 months correlation between Walthausen and Hartford is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Walthausen Small Cap and Hartford Schroders Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Schroders and Walthausen Small 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 Walthausen Small Cap are associated (or correlated) with Hartford Schroders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Schroders has no effect on the direction of Walthausen Small i.e., Walthausen Small and Hartford Schroders go up and down completely randomly.

Pair Corralation between Walthausen Small and Hartford Schroders

Assuming the 90 days horizon Walthausen Small Cap is expected to generate 1.62 times more return on investment than Hartford Schroders. However, Walthausen Small is 1.62 times more volatile than Hartford Schroders International. It trades about 0.16 of its potential returns per unit of risk. Hartford Schroders International is currently generating about -0.05 per unit of risk. If you would invest  1,558  in Walthausen Small Cap on September 3, 2024 and sell it today you would earn a total of  193.00  from holding Walthausen Small Cap or generate 12.39% return on investment over 90 days.

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

Walthausen Small Cap  vs.  Hartford Schroders Internation

Walthausen Small Cap

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walthausen Small Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Walthausen Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hartford Schroders

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Walthausen Small and Hartford Schroders

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

The idea behind Walthausen Small Cap and Hartford Schroders International 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.