Correlation Between American Funds and Hartford Schroders
Can any of the company-specific risk be diversified away by investing in both American Funds and Hartford Schroders 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 American Funds and Hartford Schroders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds New and Hartford Schroders Emerging, you can compare the effects of market volatilities on American Funds and Hartford Schroders 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 American Funds with a short position of Hartford Schroders. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Hartford Schroders.
Diversification Opportunities for American Funds and Hartford Schroders
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Hartford is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding American Funds New and Hartford Schroders Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Schroders and American Funds 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 American Funds New are associated (or correlated) with Hartford Schroders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Schroders has no effect on the direction of American Funds i.e., American Funds and Hartford Schroders go up and down completely randomly.
Pair Corralation between American Funds and Hartford Schroders
Assuming the 90 days horizon American Funds New is expected to under-perform the Hartford Schroders. But the mutual fund apears to be less risky and, when comparing its historical volatility, American Funds New is 1.08 times less risky than Hartford Schroders. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Hartford Schroders Emerging is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,620 in Hartford Schroders Emerging on February 1, 2024 and sell it today you would lose (14.00) from holding Hartford Schroders Emerging or give up 0.86% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
American Funds New vs. Hartford Schroders Emerging
Performance |
Timeline |
American Funds New |
Hartford Schroders |
American Funds and Hartford Schroders Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Funds and Hartford Schroders
The main advantage of trading using opposite American Funds and Hartford Schroders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Hartford Schroders 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 Schroders will offset losses from the drop in Hartford Schroders' long position.American Funds vs. Income Fund Of | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund | American Funds vs. American Funds Income |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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