Correlation Between Vident Core and Hartford Total

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Can any of the company-specific risk be diversified away by investing in both Vident 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 Vident 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 Vident Core US and Hartford Total Return, you can compare the effects of market volatilities on Vident 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 Vident Core with a short position of Hartford Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vident Core and Hartford Total.

Diversification Opportunities for Vident Core and Hartford Total

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Vident and Hartford is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Vident Core US 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 Vident 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 Vident Core US 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 Vident Core i.e., Vident Core and Hartford Total go up and down completely randomly.

Pair Corralation between Vident Core and Hartford Total

Given the investment horizon of 90 days Vident Core US is expected to generate 1.17 times more return on investment than Hartford Total. However, Vident Core is 1.17 times more volatile than Hartford Total Return. It trades about 0.03 of its potential returns per unit of risk. Hartford Total Return is currently generating about 0.03 per unit of risk. If you would invest  4,302  in Vident Core US on December 1, 2023 and sell it today you would earn a total of  41.00  from holding Vident Core US or generate 0.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Vident Core US  vs.  Hartford Total Return

 Performance 
       Timeline  
Vident Core US 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Vident Core US are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Vident Core is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Hartford Total Return 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Modest
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 latest stock price disturbance, may contribute to short-term losses for the investors.

Vident Core and Hartford Total Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vident Core and Hartford Total

The main advantage of trading using opposite Vident Core and Hartford Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vident 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 Vident Core US 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.
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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