Correlation Between Hartford Total and VanEck Intermediate

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Can any of the company-specific risk be diversified away by investing in both Hartford Total and VanEck Intermediate 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 Hartford Total and VanEck Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Total Return and VanEck Intermediate Muni, you can compare the effects of market volatilities on Hartford Total and VanEck Intermediate 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 Hartford Total with a short position of VanEck Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Total and VanEck Intermediate.

Diversification Opportunities for Hartford Total and VanEck Intermediate

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Hartford and VanEck is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Total Return and VanEck Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Intermediate Muni and Hartford Total 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 Hartford Total Return are associated (or correlated) with VanEck Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Intermediate Muni has no effect on the direction of Hartford Total i.e., Hartford Total and VanEck Intermediate go up and down completely randomly.

Pair Corralation between Hartford Total and VanEck Intermediate

Given the investment horizon of 90 days Hartford Total is expected to generate 2.73 times less return on investment than VanEck Intermediate. In addition to that, Hartford Total is 1.6 times more volatile than VanEck Intermediate Muni. It trades about 0.01 of its total potential returns per unit of risk. VanEck Intermediate Muni is currently generating about 0.03 per unit of volatility. If you would invest  4,478  in VanEck Intermediate Muni on December 29, 2023 and sell it today you would earn a total of  173.00  from holding VanEck Intermediate Muni or generate 3.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Hartford Total Return  vs.  VanEck Intermediate Muni

 Performance 
       Timeline  
Hartford Total Return 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Hartford Total Return has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hartford Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
VanEck Intermediate Muni 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days VanEck Intermediate Muni has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, VanEck Intermediate is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Hartford Total and VanEck Intermediate Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hartford Total and VanEck Intermediate

The main advantage of trading using opposite Hartford Total and VanEck Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Total position performs unexpectedly, VanEck Intermediate 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 VanEck Intermediate will offset losses from the drop in VanEck Intermediate's long position.
The idea behind Hartford Total Return and VanEck Intermediate Muni 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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