Correlation Between Hartford Healthcare and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Hartford Healthcare and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Hartford Healthcare and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Healthcare and Dow Jones.
Diversification Opportunities for Hartford Healthcare and Dow Jones
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hartford and Dow is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Hartford Healthcare i.e., Hartford Healthcare and Dow Jones go up and down completely randomly.
Pair Corralation between Hartford Healthcare and Dow Jones
Assuming the 90 days horizon Hartford Healthcare Hls is expected to generate 1.21 times more return on investment than Dow Jones. However, Hartford Healthcare is 1.21 times more volatile than Dow Jones Industrial. It trades about 0.31 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of risk. If you would invest 1,636 in Hartford Healthcare Hls on November 1, 2024 and sell it today you would earn a total of 86.00 from holding Hartford Healthcare Hls or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hartford Healthcare Hls vs. Dow Jones Industrial
Performance |
| Timeline |
Hartford Healthcare and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Hartford Healthcare Hls
Pair trading matchups for Hartford Healthcare
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hartford Healthcare and Dow Jones
The main advantage of trading using opposite Hartford Healthcare and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Healthcare position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Hartford Healthcare vs. Ab Bond Inflation | Hartford Healthcare vs. Ab Bond Inflation | Hartford Healthcare vs. Blrc Sgy Mnp | Hartford Healthcare vs. Vanguard E Bond |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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