Correlation Between Hartford Financial and Swiss Life
Can any of the company-specific risk be diversified away by investing in both Hartford Financial and Swiss Life 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 Financial and Swiss Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Financial and Swiss Life Holding, you can compare the effects of market volatilities on Hartford Financial and Swiss Life 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 Financial with a short position of Swiss Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Financial and Swiss Life.
Diversification Opportunities for Hartford Financial and Swiss Life
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartford and Swiss is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Financial and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life Holding and Hartford Financial 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 The Hartford Financial are associated (or correlated) with Swiss Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of Hartford Financial i.e., Hartford Financial and Swiss Life go up and down completely randomly.
Pair Corralation between Hartford Financial and Swiss Life
Assuming the 90 days trading horizon The Hartford Financial is expected to generate 0.75 times more return on investment than Swiss Life. However, The Hartford Financial is 1.33 times less risky than Swiss Life. It trades about 0.33 of its potential returns per unit of risk. Swiss Life Holding is currently generating about 0.12 per unit of risk. If you would invest 10,155 in The Hartford Financial on September 5, 2024 and sell it today you would earn a total of 1,345 from holding The Hartford Financial or generate 13.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Financial vs. Swiss Life Holding
Performance |
| Timeline |
| The Hartford Financial |
| Swiss Life Holding |
Hartford Financial and Swiss Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Financial and Swiss Life
The main advantage of trading using opposite Hartford Financial and Swiss Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Financial position performs unexpectedly, Swiss Life 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 Swiss Life will offset losses from the drop in Swiss Life's long position.| Hartford Financial vs. Berkshire Hathaway | Hartford Financial vs. AXA SA | Hartford Financial vs. AXA SA | Hartford Financial vs. Swiss Life Holding |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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