Correlation Between Hartford Healthcare and Alger Health
Can any of the company-specific risk be diversified away by investing in both Hartford Healthcare 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 Hartford Healthcare and Alger Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Healthcare Hls and Alger Health Sciences, you can compare the effects of market volatilities on Hartford Healthcare 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 Hartford Healthcare with a short position of Alger Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Healthcare and Alger Health.
Diversification Opportunities for Hartford Healthcare and Alger Health
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hartford and Alger is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls 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 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 Hartford Healthcare Hls 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 Hartford Healthcare i.e., Hartford Healthcare and Alger Health go up and down completely randomly.
Pair Corralation between Hartford Healthcare and Alger Health
Assuming the 90 days horizon Hartford Healthcare Hls is expected to generate 1.07 times more return on investment than Alger Health. However, Hartford Healthcare is 1.07 times more volatile than Alger Health Sciences. It trades about -0.01 of its potential returns per unit of risk. Alger Health Sciences is currently generating about -0.01 per unit of risk. If you would invest 1,752 in Hartford Healthcare Hls on September 12, 2024 and sell it today you would lose (28.00) from holding Hartford Healthcare Hls or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Healthcare Hls vs. Alger Health Sciences
Performance |
| Timeline |
| Hartford Healthcare Hls |
| Alger Health Sciences |
Hartford Healthcare and Alger Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Healthcare and Alger Health
The main advantage of trading using opposite Hartford Healthcare and Alger Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Healthcare 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.| Hartford Healthcare vs. Calvert Global Energy | Hartford Healthcare vs. Invesco Energy Fund | Hartford Healthcare vs. Fidelity Advisor Energy | Hartford Healthcare vs. Energy Basic Materials |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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