Correlation Between Hartford Healthcare and Oak Ridge
Can any of the company-specific risk be diversified away by investing in both Hartford Healthcare and Oak Ridge 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 Oak Ridge 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 Oak Ridge Small, you can compare the effects of market volatilities on Hartford Healthcare and Oak Ridge 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 Oak Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Healthcare and Oak Ridge.
Diversification Opportunities for Hartford Healthcare and Oak Ridge
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hartford and Oak is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls and Oak Ridge Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Ridge 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 Oak Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Ridge Small has no effect on the direction of Hartford Healthcare i.e., Hartford Healthcare and Oak Ridge go up and down completely randomly.
Pair Corralation between Hartford Healthcare and Oak Ridge
Assuming the 90 days horizon Hartford Healthcare is expected to generate 5.04 times less return on investment than Oak Ridge. But when comparing it to its historical volatility, Hartford Healthcare Hls is 1.56 times less risky than Oak Ridge. It trades about 0.02 of its potential returns per unit of risk. Oak Ridge Small is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 572.00 in Oak Ridge Small on September 12, 2024 and sell it today you would earn a total of 308.00 from holding Oak Ridge Small or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hartford Healthcare Hls vs. Oak Ridge Small
Performance |
| Timeline |
| Hartford Healthcare Hls |
| Oak Ridge Small |
Hartford Healthcare and Oak Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Healthcare and Oak Ridge
The main advantage of trading using opposite Hartford Healthcare and Oak Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Healthcare position performs unexpectedly, Oak Ridge 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 Oak Ridge will offset losses from the drop in Oak Ridge'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 |
| Oak Ridge vs. Eventide Healthcare Life | Oak Ridge vs. Hartford Healthcare Hls | Oak Ridge vs. Invesco Global Health | Oak Ridge vs. Live Oak 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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