Correlation Between The Hartford and Alger Health
Can any of the company-specific risk be diversified away by investing in both The Hartford and Alger Health 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 The Hartford and Alger Health 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 Alger Health Sciences, you can compare the effects of market volatilities on The Hartford and Alger Health 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 The Hartford with a short position of Alger Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Alger Health.
Diversification Opportunities for The Hartford and Alger Health
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THE and Alger is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Healthcare and Alger Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Health Sciences and The Hartford 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 Alger Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Health Sciences has no effect on the direction of The Hartford i.e., The Hartford and Alger Health go up and down completely randomly.
Pair Corralation between The Hartford and Alger Health
Assuming the 90 days horizon The Hartford is expected to generate 14.93 times less return on investment than Alger Health. In addition to that, The Hartford is 1.21 times more volatile than Alger Health Sciences. It trades about 0.01 of its total potential returns per unit of risk. Alger Health Sciences is currently generating about 0.14 per unit of volatility. If you would invest 1,337 in Alger Health Sciences on September 1, 2024 and sell it today you would earn a total of 33.00 from holding Alger Health Sciences or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Healthcare vs. Alger Health Sciences
Performance |
| Timeline |
| The Hartford Healthcare |
| Alger Health Sciences |
The Hartford and Alger Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Alger Health
The main advantage of trading using opposite The Hartford and Alger Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Alger Health 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 Alger Health will offset losses from the drop in Alger Health's long position.| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
| Alger Health vs. Small Cap Equity | Alger Health vs. Us Strategic Equity | Alger Health vs. Ultra Short Fixed Income | Alger Health vs. Calamos Global Equity |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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