Correlation Between Baron Health and The Hartford
Can any of the company-specific risk be diversified away by investing in both Baron Health and The Hartford 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 Baron Health and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Health Care and The Hartford Growth, you can compare the effects of market volatilities on Baron Health and The Hartford 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 Baron Health with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and The Hartford.
Diversification Opportunities for Baron Health and The Hartford
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and The is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Baron Health 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 Baron Health Care are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Baron Health i.e., Baron Health and The Hartford go up and down completely randomly.
Pair Corralation between Baron Health and The Hartford
Assuming the 90 days horizon Baron Health is expected to generate 5.74 times less return on investment than The Hartford. In addition to that, Baron Health is 1.05 times more volatile than The Hartford Growth. It trades about 0.05 of its total potential returns per unit of risk. The Hartford Growth is currently generating about 0.32 per unit of volatility. If you would invest 6,166 in The Hartford Growth on September 2, 2024 and sell it today you would earn a total of 404.00 from holding The Hartford Growth or generate 6.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. The Hartford Growth
Performance |
| Timeline |
| Baron Health Care |
| Hartford Growth |
Baron Health and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and The Hartford
The main advantage of trading using opposite Baron Health and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Baron Health vs. Lgm Risk Managed | Baron Health vs. Western Asset High | Baron Health vs. Pace High Yield | Baron Health vs. Pioneer High Yield |
| The Hartford vs. The Hartford Dividend | The Hartford vs. The Hartford Capital | The Hartford vs. The Hartford Equity | The Hartford vs. The Hartford Midcap |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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