Correlation Between Absolute Convertible and Hartford Healthcare
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible 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 Absolute Convertible and Hartford Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Hartford Healthcare Hls, you can compare the effects of market volatilities on Absolute Convertible 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 Absolute Convertible with a short position of Hartford Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Hartford Healthcare.
Diversification Opportunities for Absolute Convertible and Hartford Healthcare
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Absolute and Hartford is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage 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 Absolute Convertible 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 Absolute Convertible Arbitrage 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 Absolute Convertible i.e., Absolute Convertible and Hartford Healthcare go up and down completely randomly.
Pair Corralation between Absolute Convertible and Hartford Healthcare
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.05 times more return on investment than Hartford Healthcare. However, Absolute Convertible Arbitrage is 20.88 times less risky than Hartford Healthcare. It trades about 0.5 of its potential returns per unit of risk. Hartford Healthcare Hls is currently generating about -0.09 per unit of risk. If you would invest 1,143 in Absolute Convertible Arbitrage on August 30, 2024 and sell it today you would earn a total of 6.00 from holding Absolute Convertible Arbitrage or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Hartford Healthcare Hls
Performance |
| Timeline |
| Absolute Convertible |
| Hartford Healthcare Hls |
Absolute Convertible and Hartford Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Hartford Healthcare
The main advantage of trading using opposite Absolute Convertible and Hartford Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible 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.| Absolute Convertible vs. Aqr Managed Futures | Absolute Convertible vs. The Hartford Inflation | Absolute Convertible vs. Ab Municipal Bond | Absolute Convertible vs. Oklahoma College Savings |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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