Correlation Between Hartford Healthcare and Glg Intl
Can any of the company-specific risk be diversified away by investing in both Hartford Healthcare and Glg Intl 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 Glg Intl 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 Glg Intl Small, you can compare the effects of market volatilities on Hartford Healthcare and Glg Intl 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 Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Healthcare and Glg Intl.
Diversification Opportunities for Hartford Healthcare and Glg Intl
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hartford and Glg is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls and Glg Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glg Intl Small 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 Glg Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glg Intl Small has no effect on the direction of Hartford Healthcare i.e., Hartford Healthcare and Glg Intl go up and down completely randomly.
Pair Corralation between Hartford Healthcare and Glg Intl
Assuming the 90 days horizon Hartford Healthcare Hls is expected to under-perform the Glg Intl. But the mutual fund apears to be less risky and, when comparing its historical volatility, Hartford Healthcare Hls is 1.5 times less risky than Glg Intl. The mutual fund trades about -0.36 of its potential returns per unit of risk. The Glg Intl Small is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 8,294 in Glg Intl Small on September 25, 2024 and sell it today you would earn a total of 191.00 from holding Glg Intl Small or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Healthcare Hls vs. Glg Intl Small
Performance |
| Timeline |
| Hartford Healthcare Hls |
| Glg Intl Small |
Hartford Healthcare and Glg Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Healthcare and Glg Intl
The main advantage of trading using opposite Hartford Healthcare and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Healthcare position performs unexpectedly, Glg Intl 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 Glg Intl will offset losses from the drop in Glg Intl's long position.| Hartford Healthcare vs. Lord Abbett Diversified | Hartford Healthcare vs. Pimco Diversified Income | Hartford Healthcare vs. Adams Diversified Equity | Hartford Healthcare vs. Small Cap Stock |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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