Correlation Between Hartford Healthcare and Health Care
Can any of the company-specific risk be diversified away by investing in both Hartford Healthcare and Health Care 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 Health Care 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 Health Care Fund, you can compare the effects of market volatilities on Hartford Healthcare and Health Care 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 Health Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Healthcare and Health Care.
Diversification Opportunities for Hartford Healthcare and Health Care
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hartford and Health is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls and Health Care Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Care Fund 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 Health Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Care Fund has no effect on the direction of Hartford Healthcare i.e., Hartford Healthcare and Health Care go up and down completely randomly.
Pair Corralation between Hartford Healthcare and Health Care
Assuming the 90 days horizon Hartford Healthcare is expected to generate 25.34 times less return on investment than Health Care. But when comparing it to its historical volatility, Hartford Healthcare Hls is 17.07 times less risky than Health Care. It trades about 0.04 of its potential returns per unit of risk. Health Care Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,150 in Health Care Fund on November 27, 2024 and sell it today you would earn a total of 7,781 from holding Health Care Fund or generate 247.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Healthcare Hls vs. Health Care Fund
Performance |
| Timeline |
| Hartford Healthcare Hls |
| Health Care Fund |
Hartford Healthcare and Health Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Healthcare and Health Care
The main advantage of trading using opposite Hartford Healthcare and Health Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Healthcare position performs unexpectedly, Health Care 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 Health Care will offset losses from the drop in Health Care's long position.| Hartford Healthcare vs. Nationwide E Plus | Hartford Healthcare vs. Touchstone Ultra Short | Hartford Healthcare vs. Ab Bond Inflation | Hartford Healthcare vs. Rbc Bluebay Emerging |
| Health Care vs. Doubleline Global Bond | Health Care vs. T Rowe Price | Health Care vs. Investec Global Franchise | Health Care vs. Qs Global Equity |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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