Correlation Between The Hartford and Highland Long/short
Can any of the company-specific risk be diversified away by investing in both The Hartford and Highland Long/short 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 Highland Long/short 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 Highland Longshort Healthcare, you can compare the effects of market volatilities on The Hartford and Highland Long/short 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 Highland Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Highland Long/short.
Diversification Opportunities for The Hartford and Highland Long/short
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between The and Highland is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Healthcare and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Long/short 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 Highland Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Long/short has no effect on the direction of The Hartford i.e., The Hartford and Highland Long/short go up and down completely randomly.
Pair Corralation between The Hartford and Highland Long/short
Assuming the 90 days horizon The Hartford Healthcare is expected to generate 3.86 times more return on investment than Highland Long/short. However, The Hartford is 3.86 times more volatile than Highland Longshort Healthcare. It trades about 0.13 of its potential returns per unit of risk. Highland Longshort Healthcare is currently generating about 0.02 per unit of risk. If you would invest 3,897 in The Hartford Healthcare on November 30, 2024 and sell it today you would earn a total of 171.00 from holding The Hartford Healthcare or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Healthcare vs. Highland Longshort Healthcare
Performance |
| Timeline |
| The Hartford Healthcare |
| Highland Long/short |
The Hartford and Highland Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Highland Long/short
The main advantage of trading using opposite The Hartford and Highland Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Highland Long/short 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 Highland Long/short will offset losses from the drop in Highland Long/short's long position.| The Hartford vs. The Hartford Inflation | The Hartford vs. Ab Bond Inflation | The Hartford vs. Cref Inflation Linked Bond | The Hartford vs. Aqr Managed Futures |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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