Correlation Between IShares Russell and Hartford Multifactor
Can any of the company-specific risk be diversified away by investing in both IShares Russell and Hartford Multifactor 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 Russell and Hartford Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Russell 2000 and Hartford Multifactor Small, you can compare the effects of market volatilities on IShares Russell and Hartford Multifactor 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 Russell with a short position of Hartford Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and Hartford Multifactor.
Diversification Opportunities for IShares Russell and Hartford Multifactor
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Hartford is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 2000 and Hartford Multifactor Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Multifactor and IShares Russell 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 Russell 2000 are associated (or correlated) with Hartford Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Multifactor has no effect on the direction of IShares Russell i.e., IShares Russell and Hartford Multifactor go up and down completely randomly.
Pair Corralation between IShares Russell and Hartford Multifactor
Considering the 90-day investment horizon iShares Russell 2000 is expected to under-perform the Hartford Multifactor. In addition to that, IShares Russell is 1.09 times more volatile than Hartford Multifactor Small. It trades about -0.13 of its total potential returns per unit of risk. Hartford Multifactor Small is currently generating about -0.06 per unit of volatility. If you would invest 4,060 in Hartford Multifactor Small on January 25, 2024 and sell it today you would lose (62.00) from holding Hartford Multifactor Small or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Russell 2000 vs. Hartford Multifactor Small
Performance |
| Timeline |
| iShares Russell 2000 |
| Hartford Multifactor |
IShares Russell and Hartford Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and Hartford Multifactor
The main advantage of trading using opposite IShares Russell and Hartford Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell position performs unexpectedly, Hartford Multifactor 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 Multifactor will offset losses from the drop in Hartford Multifactor's long position.| IShares Russell vs. OShares Quality Dividend | IShares Russell vs. OShares Europe Quality | IShares Russell vs. OShares Global Internet | IShares Russell vs. ProShares SP MidCap |
| Hartford Multifactor vs. Vanguard Mid Cap Value | Hartford Multifactor vs. Vanguard Small Cap Growth | Hartford Multifactor vs. Vanguard Value Index | Hartford Multifactor vs. Vanguard Small Cap Index |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |