Correlation Between Hartford Balanced and Champlain Small

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

By analyzing existing cross correlation between The Hartford Balanced and Champlain Small, you can compare the effects of market volatilities on Hartford Balanced and Champlain Small 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 Balanced with a short position of Champlain Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Balanced and Champlain Small.

Diversification Opportunities for Hartford Balanced and Champlain Small

0.68

Correlation Coefficient

Hartford Balanced  Champlain Small

Poor diversification

The 3 months correlation between Hartford and Champlain is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Balanced and Champlain Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Small and Hartford Balanced 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 The Hartford Balanced are associated (or correlated) with Champlain Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Small has no effect on the direction of Hartford Balanced i.e., Hartford Balanced and Champlain Small go up and down completely randomly.

Pair Corralation between Hartford Balanced and Champlain Small

Assuming the 90 days horizon The Hartford Balanced is expected to generate 0.28 times more return on investment than Champlain Small. However, The Hartford Balanced is 3.52 times less risky than Champlain Small. It trades about 0.22 of its potential returns per unit of risk. Champlain Small is currently generating about 0.05 per unit of risk. If you would invest  1,898  in The Hartford Balanced on May 4, 2025 and sell it today you would earn a total of  83.00  from holding The Hartford Balanced or generate 4.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

The Hartford Balanced  vs.  Champlain Small

Hartford Balanced

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Balanced are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hartford Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Champlain Small

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Champlain Small are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Champlain Small 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 Balanced and Champlain Small

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

The idea behind The Hartford Balanced and Champlain Small 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.