Correlation Between The Hartford and Perkins Small
Can any of the company-specific risk be diversified away by investing in both The Hartford and Perkins Small 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 The Hartford and Perkins Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Inflation and Perkins Small Cap, you can compare the effects of market volatilities on The Hartford and Perkins Small 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 The Hartford with a short position of Perkins Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Perkins Small.
Diversification Opportunities for The Hartford and Perkins Small
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and Perkins is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Inflation and Perkins Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perkins Small Cap and The Hartford 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 Inflation are associated (or correlated) with Perkins Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perkins Small Cap has no effect on the direction of The Hartford i.e., The Hartford and Perkins Small go up and down completely randomly.
Pair Corralation between The Hartford and Perkins Small
Assuming the 90 days horizon The Hartford is expected to generate 5.68 times less return on investment than Perkins Small. But when comparing it to its historical volatility, The Hartford Inflation is 5.45 times less risky than Perkins Small. It trades about 0.16 of its potential returns per unit of risk. Perkins Small Cap is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,994 in Perkins Small Cap on April 23, 2025 and sell it today you would earn a total of 247.00 from holding Perkins Small Cap or generate 12.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
The Hartford Inflation vs. Perkins Small Cap
Performance |
| Timeline |
| The Hartford Inflation |
| Perkins Small Cap |
The Hartford and Perkins Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Perkins Small
The main advantage of trading using opposite The Hartford and Perkins Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Perkins Small 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 Perkins Small will offset losses from the drop in Perkins Small's long position.| The Hartford vs. Valic Company I | The Hartford vs. Lsv Small Cap | The Hartford vs. Omni Small Cap Value | The Hartford vs. Fpa Queens Road |
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Check out your portfolio center.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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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