Correlation Between Hartford Moderate and Highland Merger

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

By analyzing existing cross correlation between Hartford Moderate Allocation and Highland Merger Arbitrage, you can compare the effects of market volatilities on Hartford Moderate and Highland Merger 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 Moderate with a short position of Highland Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Moderate and Highland Merger.

Diversification Opportunities for Hartford Moderate and Highland Merger

0.0

Correlation Coefficient

Hartford Moderate  Highland Merger

Pay attention - limited upside

The 3 months correlation between Hartford and Highland is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Moderate Allocation and Highland Merger Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Merger Arbitrage and Hartford Moderate 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 Moderate Allocation are associated (or correlated) with Highland Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Merger Arbitrage has no effect on the direction of Hartford Moderate i.e., Hartford Moderate and Highland Merger go up and down completely randomly.

Pair Corralation between Hartford Moderate and Highland Merger

If you would invest  1,960  in Highland Merger Arbitrage on May 7, 2025 and sell it today you would earn a total of  33.00  from holding Highland Merger Arbitrage or generate 1.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Hartford Moderate Allocation  vs.  Highland Merger Arbitrage

Hartford Moderate

Risk-Adjusted Performance

Solid

Over the last 90 days Hartford Moderate Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hartford Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Highland Merger Arbitrage

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Merger Arbitrage are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Highland Merger is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hartford Moderate and Highland Merger

The main advantage of trading using opposite Hartford Moderate and Highland Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Moderate position performs unexpectedly, Highland Merger 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 Highland Merger will offset losses from the drop in Highland Merger's long position.

The idea behind Hartford Moderate Allocation and Highland Merger Arbitrage 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.