Correlation Between SPDR Morgan and Hartford Schroders

Can any of the company-specific risk be diversified away by investing in both SPDR Morgan 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 SPDR Morgan and Hartford Schroders into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPDR Morgan Stanley and Hartford Schroders Emerging, you can compare the effects of market volatilities on SPDR Morgan 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 SPDR Morgan with a short position of Hartford Schroders. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Morgan and Hartford Schroders.

Diversification Opportunities for SPDR Morgan and Hartford Schroders

0.31

Correlation Coefficient

SPDR Morgan  Hartford Schroders

Weak diversification

The 3 months correlation between SPDR and Hartford is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Morgan Stanley and Hartford Schroders Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Schroders and SPDR Morgan 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 SPDR Morgan Stanley 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 SPDR Morgan i.e., SPDR Morgan and Hartford Schroders go up and down completely randomly.

Pair Corralation between SPDR Morgan and Hartford Schroders

Given the investment horizon of 90 days SPDR Morgan is expected to generate 1.89 times less return on investment than Hartford Schroders. In addition to that, SPDR Morgan is 1.93 times more volatile than Hartford Schroders Emerging. It trades about 0.15 of its total potential returns per unit of risk. Hartford Schroders Emerging is currently generating about 0.54 per unit of volatility. If you would invest  1,562  in Hartford Schroders Emerging on February 16, 2024 and sell it today you would earn a total of  141.00  from holding Hartford Schroders Emerging or generate 9.03% return on investment over 90 days.

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

SPDR Morgan Stanley  vs.  Hartford Schroders Emerging

SPDR Morgan Stanley

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Morgan Stanley are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, SPDR Morgan is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Hartford Schroders

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Schroders Emerging are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Hartford Schroders may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with SPDR Morgan and Hartford Schroders

The main advantage of trading using opposite SPDR Morgan and Hartford Schroders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Morgan 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.

The idea behind SPDR Morgan Stanley and Hartford Schroders Emerging 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.