Correlation Between The Hartford and Jennison Natural
Can any of the company-specific risk be diversified away by investing in both The Hartford and Jennison Natural 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 Jennison Natural 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 Jennison Natural Resources, you can compare the effects of market volatilities on The Hartford and Jennison Natural 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 Jennison Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Jennison Natural.
Diversification Opportunities for The Hartford and Jennison Natural
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and Jennison is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Healthcare and Jennison Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jennison Natural Res 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 Jennison Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jennison Natural Res has no effect on the direction of The Hartford i.e., The Hartford and Jennison Natural go up and down completely randomly.
Pair Corralation between The Hartford and Jennison Natural
Assuming the 90 days horizon The Hartford Healthcare is expected to generate 0.67 times more return on investment than Jennison Natural. However, The Hartford Healthcare is 1.5 times less risky than Jennison Natural. It trades about -0.04 of its potential returns per unit of risk. Jennison Natural Resources is currently generating about -0.03 per unit of risk. If you would invest 4,458 in The Hartford Healthcare on October 13, 2024 and sell it today you would lose (27.00) from holding The Hartford Healthcare or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Healthcare vs. Jennison Natural Resources
Performance |
| Timeline |
| The Hartford Healthcare |
| Jennison Natural Res |
The Hartford and Jennison Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Jennison Natural
The main advantage of trading using opposite The Hartford and Jennison Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Jennison Natural 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 Jennison Natural will offset losses from the drop in Jennison Natural's long position.| The Hartford vs. The Hartford Healthcare | The Hartford vs. Hartford Healthcare Hls | The Hartford vs. The Hartford Global | The Hartford vs. Hartford Healthcare Hls |
| Jennison Natural vs. Tekla Healthcare Investors | Jennison Natural vs. The Hartford Healthcare | Jennison Natural vs. Live Oak Health | Jennison Natural vs. Prudential Health Sciences |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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