Correlation Between Catholic Values and The Hartford
Can any of the company-specific risk be diversified away by investing in both Catholic Values 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 Catholic Values and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catholic Values Fixed and The Hartford Healthcare, you can compare the effects of market volatilities on Catholic Values 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 Catholic Values with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catholic Values and The Hartford.
Diversification Opportunities for Catholic Values and The Hartford
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catholic and The is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Catholic Values Fixed and The Hartford Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Healthcare and Catholic Values 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 Catholic Values Fixed 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 The Hartford Healthcare has no effect on the direction of Catholic Values i.e., Catholic Values and The Hartford go up and down completely randomly.
Pair Corralation between Catholic Values and The Hartford
Assuming the 90 days horizon Catholic Values is expected to generate 1.68 times less return on investment than The Hartford. But when comparing it to its historical volatility, Catholic Values Fixed is 1.8 times less risky than The Hartford. It trades about 0.05 of its potential returns per unit of risk. The Hartford Healthcare is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,919 in The Hartford Healthcare on September 3, 2024 and sell it today you would earn a total of 455.00 from holding The Hartford Healthcare or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catholic Values Fixed vs. The Hartford Healthcare
Performance |
| Timeline |
| Catholic Values Fixed |
| The Hartford Healthcare |
Catholic Values and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catholic Values and The Hartford
The main advantage of trading using opposite Catholic Values and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catholic Values 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.| Catholic Values vs. Bbh Intermediate Municipal | Catholic Values vs. Rationalpier 88 Convertible | Catholic Values vs. Maryland Tax Free Bond | Catholic Values vs. Blrc Sgy Mnp |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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