Correlation Between Hartford Total and First Trust
Can any of the company-specific risk be diversified away by investing in both Hartford Total and First Trust 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 Hartford Total and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Total Return and First Trust Enhanced, you can compare the effects of market volatilities on Hartford Total and First Trust 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 Hartford Total with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Total and First Trust.
Diversification Opportunities for Hartford Total and First Trust
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hartford and First is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Total Return and First Trust Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Enhanced and Hartford Total 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 Hartford Total Return are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Enhanced has no effect on the direction of Hartford Total i.e., Hartford Total and First Trust go up and down completely randomly.
Pair Corralation between Hartford Total and First Trust
Given the investment horizon of 90 days Hartford Total Return is expected to under-perform the First Trust. In addition to that, Hartford Total is 10.97 times more volatile than First Trust Enhanced. It trades about -0.07 of its total potential returns per unit of risk. First Trust Enhanced is currently generating about 0.52 per unit of volatility. If you would invest 5,934 in First Trust Enhanced on January 25, 2024 and sell it today you would earn a total of 41.00 from holding First Trust Enhanced or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Total Return vs. First Trust Enhanced
Performance |
| Timeline |
| Hartford Total Return |
| First Trust Enhanced |
Hartford Total and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Total and First Trust
The main advantage of trading using opposite Hartford Total and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Total position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Hartford Total vs. Fidelity Corporate Bond | Hartford Total vs. Fidelity Limited Term | Hartford Total vs. Fidelity High Yield | Hartford Total vs. Fidelity High Dividend |
| First Trust vs. iShares ESG 1 5 | First Trust vs. First Trust Low | First Trust vs. First Trust Managed | First Trust vs. First Trust Senior |
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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