Correlation Between The Hartford and Matthews Japan
Can any of the company-specific risk be diversified away by investing in both The Hartford and Matthews Japan 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 Matthews Japan 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 Matthews Japan Fund, you can compare the effects of market volatilities on The Hartford and Matthews Japan 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 Matthews Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Matthews Japan.
Diversification Opportunities for The Hartford and Matthews Japan
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between The and Matthews is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Inflation and Matthews Japan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Japan 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 Matthews Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Japan has no effect on the direction of The Hartford i.e., The Hartford and Matthews Japan go up and down completely randomly.
Pair Corralation between The Hartford and Matthews Japan
Assuming the 90 days horizon The Hartford is expected to generate 16.72 times less return on investment than Matthews Japan. But when comparing it to its historical volatility, The Hartford Inflation is 8.69 times less risky than Matthews Japan. It trades about 0.03 of its potential returns per unit of risk. Matthews Japan Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,360 in Matthews Japan Fund on September 9, 2025 and sell it today you would earn a total of 107.00 from holding Matthews Japan Fund or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Inflation vs. Matthews Japan Fund
Performance |
| Timeline |
| The Hartford Inflation |
| Matthews Japan |
The Hartford and Matthews Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Matthews Japan
The main advantage of trading using opposite The Hartford and Matthews Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Matthews Japan 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 Matthews Japan will offset losses from the drop in Matthews Japan's long position.The idea behind The Hartford Inflation and Matthews Japan Fund 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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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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