Correlation Between Hartford Healthcare and Locorr Market
Can any of the company-specific risk be diversified away by investing in both Hartford Healthcare and Locorr Market 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 Locorr Market 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 Locorr Market Trend, you can compare the effects of market volatilities on Hartford Healthcare and Locorr Market 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 Locorr Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Healthcare and Locorr Market.
Diversification Opportunities for Hartford Healthcare and Locorr Market
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HARTFORD and Locorr is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls and Locorr Market Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Market Trend 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 Locorr Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Market Trend has no effect on the direction of Hartford Healthcare i.e., Hartford Healthcare and Locorr Market go up and down completely randomly.
Pair Corralation between Hartford Healthcare and Locorr Market
Assuming the 90 days horizon Hartford Healthcare Hls is expected to under-perform the Locorr Market. In addition to that, Hartford Healthcare is 1.01 times more volatile than Locorr Market Trend. It trades about -0.01 of its total potential returns per unit of risk. Locorr Market Trend is currently generating about 0.06 per unit of volatility. If you would invest 1,036 in Locorr Market Trend on September 5, 2024 and sell it today you would earn a total of 39.00 from holding Locorr Market Trend or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Healthcare Hls vs. Locorr Market Trend
Performance |
| Timeline |
| Hartford Healthcare Hls |
| Locorr Market Trend |
Hartford Healthcare and Locorr Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Healthcare and Locorr Market
The main advantage of trading using opposite Hartford Healthcare and Locorr Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Healthcare position performs unexpectedly, Locorr Market 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 Locorr Market will offset losses from the drop in Locorr Market's long position.| Hartford Healthcare vs. Jhancock Real Estate | Hartford Healthcare vs. Real Estate Ultrasector | Hartford Healthcare vs. Columbia Real Estate | Hartford Healthcare vs. Pender Real Estate |
| Locorr Market vs. Hartford Healthcare Hls | Locorr Market vs. The Gabelli Healthcare | Locorr Market vs. Baron Health Care | Locorr Market vs. Putnam Global Health |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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