Correlation Between Hartford Healthcare and Icon Information
Can any of the company-specific risk be diversified away by investing in both Hartford Healthcare and Icon Information 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 Icon Information 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 Icon Information Technology, you can compare the effects of market volatilities on Hartford Healthcare and Icon Information 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 Icon Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Healthcare and Icon Information.
Diversification Opportunities for Hartford Healthcare and Icon Information
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartford and Icon is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls and Icon Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Information Tec 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 Icon Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Information Tec has no effect on the direction of Hartford Healthcare i.e., Hartford Healthcare and Icon Information go up and down completely randomly.
Pair Corralation between Hartford Healthcare and Icon Information
Assuming the 90 days horizon Hartford Healthcare is expected to generate 1.15 times less return on investment than Icon Information. But when comparing it to its historical volatility, Hartford Healthcare Hls is 1.08 times less risky than Icon Information. It trades about 0.3 of its potential returns per unit of risk. Icon Information Technology is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,584 in Icon Information Technology on November 3, 2024 and sell it today you would earn a total of 104.00 from holding Icon Information Technology or generate 6.57% 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. Icon Information Technology
Performance |
| Timeline |
| Hartford Healthcare Hls |
| Icon Information Tec |
Hartford Healthcare and Icon Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Healthcare and Icon Information
The main advantage of trading using opposite Hartford Healthcare and Icon Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Healthcare position performs unexpectedly, Icon Information 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 Icon Information will offset losses from the drop in Icon Information's long position.| Hartford Healthcare vs. T Rowe Price | Hartford Healthcare vs. Gmo Emerging Ntry | Hartford Healthcare vs. Artisan High Income | Hartford Healthcare vs. Multisector Bond Sma |
| Icon Information vs. Mid Cap 15x Strategy | Icon Information vs. Vanguard Developed Markets | Icon Information vs. Old Westbury Short Term | Icon Information vs. Siit Emerging Markets |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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