Correlation Between IShares Trust and Hartford Total
Can any of the company-specific risk be diversified away by investing in both IShares Trust 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 Trust 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 Trust and Hartford Total Return, you can compare the effects of market volatilities on IShares Trust 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 Trust with a short position of Hartford Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Hartford Total.
Diversification Opportunities for IShares Trust and Hartford Total
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Hartford is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust 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 Trust 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 Trust 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 Trust i.e., IShares Trust and Hartford Total go up and down completely randomly.
Pair Corralation between IShares Trust and Hartford Total
Given the investment horizon of 90 days iShares Trust is expected to under-perform the Hartford Total. But the etf apears to be less risky and, when comparing its historical volatility, iShares Trust is 1.2 times less risky than Hartford Total. The etf trades about -0.09 of its potential returns per unit of risk. The Hartford Total Return is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 3,341 in Hartford Total Return on February 4, 2024 and sell it today you would lose (20.00) from holding Hartford Total Return or give up 0.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Trust vs. Hartford Total Return
Performance |
Timeline |
iShares Trust |
Hartford Total Return |
IShares Trust and Hartford Total Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Trust and Hartford Total
The main advantage of trading using opposite IShares Trust and Hartford Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust 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.IShares Trust vs. JPMorgan Emerging Markets | IShares Trust vs. JPMorgan BetaBuilders Canada | IShares Trust vs. Aquagold International | IShares Trust vs. Morningstar Unconstrained Allocation |
Hartford Total vs. JPMorgan Emerging Markets | Hartford Total vs. JPMorgan BetaBuilders Canada | Hartford Total vs. Aquagold International | Hartford Total vs. Morningstar Unconstrained Allocation |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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