Correlation Between Columbia Mid and The Hartford
Can any of the company-specific risk be diversified away by investing in both Columbia Mid and The Hartford 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 Columbia Mid and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Mid Cap and The Hartford Midcap, you can compare the effects of market volatilities on Columbia Mid and The Hartford 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 Columbia Mid with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Mid and The Hartford.
Diversification Opportunities for Columbia Mid and The Hartford
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Columbia and The is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Mid Cap and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap and Columbia Mid 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 Columbia Mid Cap are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Midcap has no effect on the direction of Columbia Mid i.e., Columbia Mid and The Hartford go up and down completely randomly.
Pair Corralation between Columbia Mid and The Hartford
Assuming the 90 days horizon Columbia Mid Cap is expected to generate 0.91 times more return on investment than The Hartford. However, Columbia Mid Cap is 1.09 times less risky than The Hartford. It trades about -0.05 of its potential returns per unit of risk. The Hartford Midcap is currently generating about -0.12 per unit of risk. If you would invest 1,183 in Columbia Mid Cap on January 17, 2024 and sell it today you would lose (11.00) from holding Columbia Mid Cap or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Mid Cap vs. The Hartford Midcap
Performance |
| Timeline |
| Columbia Mid Cap |
| Hartford Midcap |
Columbia Mid and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Mid and The Hartford
The main advantage of trading using opposite Columbia Mid and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Mid position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Columbia Mid vs. Columbia Porate Income | Columbia Mid vs. Columbia Ultra Short | Columbia Mid vs. Columbia Ultra Short | Columbia Mid vs. Columbia Treasury Index |
| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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