Correlation Between Great West and Hartford Inflation

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

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

Diversification Opportunities for Great West and Hartford Inflation

0.99

Correlation Coefficient

Great West  Hartford Inflation

No risk reduction

The 3 months correlation between Great and Hartford is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Great West Inflation Protected and The Hartford Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Inflation and Great West 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 Great West Inflation Protected Securities are associated (or correlated) with Hartford Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Inflation has no effect on the direction of Great West i.e., Great West and Hartford Inflation go up and down completely randomly.

Pair Corralation between Great West and Hartford Inflation

Assuming the 90 days horizon Great West Inflation Protected Securities is expected to generate 0.86 times more return on investment than Hartford Inflation. However, Great West Inflation Protected Securities is 1.16 times less risky than Hartford Inflation. It trades about 0.17 of its potential returns per unit of risk. The Hartford Inflation is currently generating about 0.13 per unit of risk. If you would invest  921.00  in Great West Inflation Protected Securities on May 7, 2025 and sell it today you would earn a total of  18.00  from holding Great West Inflation Protected Securities or generate 1.95% return on investment over 90 days.

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

Great West Inflation Protected  vs.  The Hartford Inflation

Great West Inflation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Inflation Protected Securities are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Great West is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

The Hartford Inflation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Inflation are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hartford Inflation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Great West and Hartford Inflation

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

The idea behind Great West Inflation Protected Securities and The Hartford Inflation 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.