Correlation Between Hartford Healthcare and Highland Longshort
Can any of the company-specific risk be diversified away by investing in both Hartford Healthcare and Highland Longshort 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 Hartford Healthcare and Highland Longshort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Healthcare Hls and Highland Longshort Healthcare, you can compare the effects of market volatilities on Hartford Healthcare and Highland Longshort 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 Hartford Healthcare with a short position of Highland Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Healthcare and Highland Longshort.
Diversification Opportunities for Hartford Healthcare and Highland Longshort
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartford and Highland is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Longshort and Hartford Healthcare 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 Hartford Healthcare Hls are associated (or correlated) with Highland Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Longshort has no effect on the direction of Hartford Healthcare i.e., Hartford Healthcare and Highland Longshort go up and down completely randomly.
Pair Corralation between Hartford Healthcare and Highland Longshort
Assuming the 90 days horizon Hartford Healthcare is expected to generate 1.35 times less return on investment than Highland Longshort. In addition to that, Hartford Healthcare is 3.79 times more volatile than Highland Longshort Healthcare. It trades about 0.03 of its total potential returns per unit of risk. Highland Longshort Healthcare is currently generating about 0.13 per unit of volatility. If you would invest 1,456 in Highland Longshort Healthcare on November 4, 2024 and sell it today you would earn a total of 206.00 from holding Highland Longshort Healthcare or generate 14.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Healthcare Hls vs. Highland Longshort Healthcare
Performance |
| Timeline |
| Hartford Healthcare Hls |
| Highland Longshort |
Hartford Healthcare and Highland Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Healthcare and Highland Longshort
The main advantage of trading using opposite Hartford Healthcare and Highland Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Healthcare position performs unexpectedly, Highland Longshort 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 Highland Longshort will offset losses from the drop in Highland Longshort's long position.| Hartford Healthcare vs. Franklin Adjustable Government | Hartford Healthcare vs. Elfun Government Money | Hartford Healthcare vs. Voya Government Money | Hartford Healthcare vs. Intermediate Government Bond |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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