Correlation Between Hartford Healthcare and Equity Income
Can any of the company-specific risk be diversified away by investing in both Hartford Healthcare and Equity Income 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 Equity Income 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 Equity Income Fund, you can compare the effects of market volatilities on Hartford Healthcare and Equity Income 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 Equity Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Healthcare and Equity Income.
Diversification Opportunities for Hartford Healthcare and Equity Income
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hartford and Equity is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls and Equity Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Income 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 Equity Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Income has no effect on the direction of Hartford Healthcare i.e., Hartford Healthcare and Equity Income go up and down completely randomly.
Pair Corralation between Hartford Healthcare and Equity Income
Assuming the 90 days horizon Hartford Healthcare is expected to generate 1.22 times less return on investment than Equity Income. In addition to that, Hartford Healthcare is 1.32 times more volatile than Equity Income Fund. It trades about 0.04 of its total potential returns per unit of risk. Equity Income Fund is currently generating about 0.06 per unit of volatility. If you would invest 851.00 in Equity Income Fund on September 12, 2024 and sell it today you would earn a total of 91.00 from holding Equity Income Fund or generate 10.69% 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. Equity Income Fund
Performance |
| Timeline |
| Hartford Healthcare Hls |
| Equity Income |
Hartford Healthcare and Equity Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Healthcare and Equity Income
The main advantage of trading using opposite Hartford Healthcare and Equity Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Healthcare position performs unexpectedly, Equity Income 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 Equity Income will offset losses from the drop in Equity Income'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 |
| Equity Income vs. Highland Longshort Healthcare | Equity Income vs. Baron Health Care | Equity Income vs. Hartford Healthcare Hls | Equity Income vs. Health Biotchnology Portfolio |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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