Correlation Between IShares Core and Hartford Total

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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 5 10 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

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between IShares and Hartford is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding IShares Core 5-10 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 5 10 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

Given the investment horizon of 90 days IShares Core 5 10 is expected to generate 1.31 times more return on investment than Hartford Total. However, IShares Core is 1.31 times more volatile than Hartford Total Return. It trades about 0.22 of its potential returns per unit of risk. Hartford Total Return is currently generating about 0.25 per unit of risk. If you would invest  4,232  in IShares Core 5 10 on December 30, 2023 and sell it today you would earn a total of  58.00  from holding IShares Core 5 10 or generate 1.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

IShares Core 5-10  vs.  Hartford Total Return

 Performance 
       Timeline  
IShares Core 5-10 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days IShares Core 5 10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, IShares Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Hartford Total Return 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Total Return are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Hartford Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.
The idea behind IShares Core 5 10 and Hartford Total Return 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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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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