Correlation Between HCI and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both HCI and Hartford Financial 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 HCI and Hartford Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCI Group and Hartford Financial Services, you can compare the effects of market volatilities on HCI and Hartford Financial 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 HCI with a short position of Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCI and Hartford Financial.
Diversification Opportunities for HCI and Hartford Financial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HCI and Hartford is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding HCI Group and Hartford Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Financial and HCI 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 HCI Group are associated (or correlated) with Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Financial has no effect on the direction of HCI i.e., HCI and Hartford Financial go up and down completely randomly.
Pair Corralation between HCI and Hartford Financial
Considering the 90-day investment horizon HCI is expected to generate 1.16 times less return on investment than Hartford Financial. In addition to that, HCI is 2.03 times more volatile than Hartford Financial Services. It trades about 0.07 of its total potential returns per unit of risk. Hartford Financial Services is currently generating about 0.16 per unit of volatility. If you would invest 7,724 in Hartford Financial Services on September 2, 2024 and sell it today you would earn a total of 4,607 from holding Hartford Financial Services or generate 59.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCI Group vs. Hartford Financial Services
Performance |
| Timeline |
| HCI Group |
| Hartford Financial |
HCI and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCI and Hartford Financial
The main advantage of trading using opposite HCI and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCI position performs unexpectedly, Hartford Financial 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 Financial will offset losses from the drop in Hartford Financial's long position.| HCI vs. Universal Insurance Holdings | HCI vs. Kingstone Companies | HCI vs. Horace Mann Educators | HCI vs. Heritage Insurance Hldgs |
| Hartford Financial vs. Goosehead Insurance | Hartford Financial vs. International General Insurance | Hartford Financial vs. Enstar Group Limited | Hartford Financial vs. Arch Capital Group |
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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