Correlation Between Aberden Emerng and Hartford Healthcare
Can any of the company-specific risk be diversified away by investing in both Aberden Emerng and Hartford Healthcare 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 Aberden Emerng and Hartford Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberden Emerng Mrkts and Hartford Healthcare Hls, you can compare the effects of market volatilities on Aberden Emerng and Hartford Healthcare 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 Aberden Emerng with a short position of Hartford Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberden Emerng and Hartford Healthcare.
Diversification Opportunities for Aberden Emerng and Hartford Healthcare
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aberden and Hartford is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aberden Emerng Mrkts and Hartford Healthcare Hls in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Healthcare Hls and Aberden Emerng 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 Aberden Emerng Mrkts are associated (or correlated) with Hartford Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Healthcare Hls has no effect on the direction of Aberden Emerng i.e., Aberden Emerng and Hartford Healthcare go up and down completely randomly.
Pair Corralation between Aberden Emerng and Hartford Healthcare
Assuming the 90 days horizon Aberden Emerng Mrkts is expected to generate 1.18 times more return on investment than Hartford Healthcare. However, Aberden Emerng is 1.18 times more volatile than Hartford Healthcare Hls. It trades about 0.03 of its potential returns per unit of risk. Hartford Healthcare Hls is currently generating about 0.03 per unit of risk. If you would invest 1,246 in Aberden Emerng Mrkts on August 30, 2024 and sell it today you would earn a total of 133.00 from holding Aberden Emerng Mrkts or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberden Emerng Mrkts vs. Hartford Healthcare Hls
Performance |
| Timeline |
| Aberden Emerng Mrkts |
| Hartford Healthcare Hls |
Aberden Emerng and Hartford Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberden Emerng and Hartford Healthcare
The main advantage of trading using opposite Aberden Emerng and Hartford Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberden Emerng position performs unexpectedly, Hartford Healthcare 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 Healthcare will offset losses from the drop in Hartford Healthcare's long position.| Aberden Emerng vs. Hartford Healthcare Hls | Aberden Emerng vs. Invesco Global Health | Aberden Emerng vs. Lord Abbett Health | Aberden Emerng vs. Tekla Healthcare Opportunities |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |