Correlation Between The Hartford and Catalyst/smh Total

Can any of the company-specific risk be diversified away by investing in both The Hartford and Catalyst/smh 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 The Hartford and Catalyst/smh Total into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Hartford Balanced and Catalystsmh Total Return, you can compare the effects of market volatilities on The Hartford and Catalyst/smh 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 The Hartford with a short position of Catalyst/smh Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Catalyst/smh Total.

Diversification Opportunities for The Hartford and Catalyst/smh Total

0.9

Correlation Coefficient

The Hartford  Catalyst/smh Total

Almost no diversification

The 3 months correlation between The and Catalyst/smh is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Balanced and Catalystsmh Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh Total Return 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 Balanced are associated (or correlated) with Catalyst/smh Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh Total Return has no effect on the direction of The Hartford i.e., The Hartford and Catalyst/smh Total go up and down completely randomly.

Pair Corralation between The Hartford and Catalyst/smh Total

Assuming the 90 days horizon The Hartford Balanced is expected to generate 1.18 times more return on investment than Catalyst/smh Total. However, The Hartford is 1.18 times more volatile than Catalystsmh Total Return. It trades about -0.01 of its potential returns per unit of risk. Catalystsmh Total Return is currently generating about -0.01 per unit of risk. If you would invest  1,458  in The Hartford Balanced on February 27, 2024 and sell it today you would lose (2.00) from holding The Hartford Balanced or give up 0.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

The Hartford Balanced  vs.  Catalystsmh Total Return

Hartford Balanced

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Balanced are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, The Hartford is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Catalystsmh Total Return

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystsmh Total Return are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Catalyst/smh Total is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with The Hartford and Catalyst/smh Total

The main advantage of trading using opposite The Hartford and Catalyst/smh Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Catalyst/smh 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 Catalyst/smh Total will offset losses from the drop in Catalyst/smh Total's long position.

The idea behind The Hartford Balanced and Catalystsmh 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.