Correlation Between Highland Longshort and Hartford Healthcare
Can any of the company-specific risk be diversified away by investing in both Highland Longshort and Hartford Healthcare 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 Highland Longshort and Hartford Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Hartford Healthcare Hls, you can compare the effects of market volatilities on Highland Longshort and Hartford Healthcare 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 Highland Longshort with a short position of Hartford Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Longshort and Hartford Healthcare.
Diversification Opportunities for Highland Longshort and Hartford Healthcare
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Highland and Hartford is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Hartford Healthcare Hls in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Healthcare Hls and Highland Longshort 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 Highland Longshort Healthcare are associated (or correlated) with Hartford Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Healthcare Hls has no effect on the direction of Highland Longshort i.e., Highland Longshort and Hartford Healthcare go up and down completely randomly.
Pair Corralation between Highland Longshort and Hartford Healthcare
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 0.26 times more return on investment than Hartford Healthcare. However, Highland Longshort Healthcare is 3.79 times less risky than Hartford Healthcare. It trades about 0.13 of its potential returns per unit of risk. Hartford Healthcare Hls is currently generating about 0.03 per unit of risk. If you would invest 1,456 in Highland Longshort Healthcare on November 4, 2024 and sell it today you would earn a total of 206.00 from holding Highland Longshort Healthcare or generate 14.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Hartford Healthcare Hls
Performance |
| Timeline |
| Highland Longshort |
| Hartford Healthcare Hls |
Highland Longshort and Hartford Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Longshort and Hartford Healthcare
The main advantage of trading using opposite Highland Longshort and Hartford Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Longshort position performs unexpectedly, Hartford Healthcare 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 Hartford Healthcare will offset losses from the drop in Hartford Healthcare's long position.| Highland Longshort vs. Tiaa Cref Lifecycle Retirement | Highland Longshort vs. Voya Retirement Servative | Highland Longshort vs. Wilmington Trust Retirement | Highland Longshort vs. Putnman Retirement Ready |
| Hartford Healthcare vs. Franklin Adjustable Government | Hartford Healthcare vs. Elfun Government Money | Hartford Healthcare vs. Voya Government Money | Hartford Healthcare vs. Intermediate Government Bond |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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