Correlation Between Hartford Healthcare and The Hartford
Can any of the company-specific risk be diversified away by investing in both Hartford Healthcare 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 Hartford Healthcare and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Healthcare and The Hartford Healthcare, you can compare the effects of market volatilities on Hartford Healthcare 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 Hartford Healthcare with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Healthcare and The Hartford.
Diversification Opportunities for Hartford Healthcare and The Hartford
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hartford and The is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Healthcare 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 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 The Hartford Healthcare 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 Hartford Healthcare i.e., Hartford Healthcare and The Hartford go up and down completely randomly.
Pair Corralation between Hartford Healthcare and The Hartford
Assuming the 90 days horizon Hartford Healthcare is expected to generate 1.15 times less return on investment than The Hartford. But when comparing it to its historical volatility, The Hartford Healthcare is 1.01 times less risky than The Hartford. It trades about 0.25 of its potential returns per unit of risk. The Hartford Healthcare is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 4,384 in The Hartford Healthcare on November 4, 2024 and sell it today you would earn a total of 229.00 from holding The Hartford Healthcare or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Healthcare vs. The Hartford Healthcare
Performance |
| Timeline |
| The Hartford Healthcare |
| The Hartford Healthcare |
Hartford Healthcare and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Healthcare and The Hartford
The main advantage of trading using opposite Hartford Healthcare and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Healthcare 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.| Hartford Healthcare vs. Lebenthal Lisanti Small | Hartford Healthcare vs. Df Dent Small | Hartford Healthcare vs. Small Pany Growth | Hartford Healthcare vs. Franklin Small Cap |
| The Hartford vs. The Hartford Healthcare | The Hartford vs. Hartford Healthcare Hls | The Hartford vs. The Hartford Global | The Hartford vs. Hartford Healthcare Hls |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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