Correlation Between IShares Core and Hartford Total
Can any of the company-specific risk be diversified away by investing in both IShares Core and Hartford Total 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 IShares Core and Hartford Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Aggregate and Hartford Total Return, you can compare the effects of market volatilities on IShares Core and Hartford Total 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 IShares Core with a short position of Hartford Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Hartford Total.
Diversification Opportunities for IShares Core and Hartford Total
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Hartford is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Aggregate and Hartford Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Total Return and IShares Core 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 iShares Core Aggregate are associated (or correlated) with Hartford Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Total Return has no effect on the direction of IShares Core i.e., IShares Core and Hartford Total go up and down completely randomly.
Pair Corralation between IShares Core and Hartford Total
Considering the 90-day investment horizon iShares Core Aggregate is expected to under-perform the Hartford Total. But the etf apears to be less risky and, when comparing its historical volatility, iShares Core Aggregate is 1.06 times less risky than Hartford Total. The etf trades about 0.0 of its potential returns per unit of risk. The Hartford Total Return is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,260 in Hartford Total Return on January 20, 2024 and sell it today you would earn a total of 26.00 from holding Hartford Total Return or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Aggregate vs. Hartford Total Return
Performance |
| Timeline |
| iShares Core Aggregate |
| Hartford Total Return |
IShares Core and Hartford Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Hartford Total
The main advantage of trading using opposite IShares Core and Hartford Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Hartford Total 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 Total will offset losses from the drop in Hartford Total's long position.| IShares Core vs. Vanguard Short Term Bond | IShares Core vs. Vanguard Long Term Bond | IShares Core vs. Vanguard Intermediate Term Corporate | IShares Core vs. Vanguard Short Term Corporate |
| Hartford Total vs. SPDR SSGA Sector | Hartford Total vs. SPDR DoubleLine Emerging | Hartford Total vs. SPDR DoubleLine Short | Hartford Total vs. SPDR SSgA Ultra |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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