Correlation Between The Hartford and Absolute Capital
Can any of the company-specific risk be diversified away by investing in both The Hartford and Absolute Capital 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 Absolute Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Emerging and Absolute Capital Defender, you can compare the effects of market volatilities on The Hartford and Absolute Capital 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 Absolute Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Absolute Capital.
Diversification Opportunities for The Hartford and Absolute Capital
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and Absolute is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Emerging and Absolute Capital Defender in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Capital Defender 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 Emerging are associated (or correlated) with Absolute Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Capital Defender has no effect on the direction of The Hartford i.e., The Hartford and Absolute Capital go up and down completely randomly.
Pair Corralation between The Hartford and Absolute Capital
Assuming the 90 days horizon The Hartford Emerging is expected to generate 0.36 times more return on investment than Absolute Capital. However, The Hartford Emerging is 2.74 times less risky than Absolute Capital. It trades about 0.15 of its potential returns per unit of risk. Absolute Capital Defender is currently generating about 0.03 per unit of risk. If you would invest 456.00 in The Hartford Emerging on March 17, 2025 and sell it today you would earn a total of 18.00 from holding The Hartford Emerging or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Emerging vs. Absolute Capital Defender
Performance |
| Timeline |
| Hartford Emerging |
| Absolute Capital Defender |
The Hartford and Absolute Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Absolute Capital
The main advantage of trading using opposite The Hartford and Absolute Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Absolute Capital 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 Absolute Capital will offset losses from the drop in Absolute Capital's long position.| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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