Correlation Between Hartford Small and Hartford Healthcare
Can any of the company-specific risk be diversified away by investing in both Hartford Small and Hartford Healthcare 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 Small and Hartford Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Small Cap and Hartford Healthcare Hls, you can compare the effects of market volatilities on Hartford Small and Hartford Healthcare 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 Small with a short position of Hartford Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Small and Hartford Healthcare.
Diversification Opportunities for Hartford Small and Hartford Healthcare
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hartford and Hartford is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Small Cap and Hartford Healthcare Hls in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Healthcare Hls and Hartford Small 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 Small Cap are associated (or correlated) with Hartford Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Healthcare Hls has no effect on the direction of Hartford Small i.e., Hartford Small and Hartford Healthcare go up and down completely randomly.
Pair Corralation between Hartford Small and Hartford Healthcare
Assuming the 90 days horizon Hartford Small Cap is expected to generate 1.53 times more return on investment than Hartford Healthcare. However, Hartford Small is 1.53 times more volatile than Hartford Healthcare Hls. It trades about 0.22 of its potential returns per unit of risk. Hartford Healthcare Hls is currently generating about -0.12 per unit of risk. If you would invest 2,935 in Hartford Small Cap on August 29, 2024 and sell it today you would earn a total of 223.00 from holding Hartford Small Cap or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Small Cap vs. Hartford Healthcare Hls
Performance |
| Timeline |
| Hartford Small Cap |
| Hartford Healthcare Hls |
Hartford Small and Hartford Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Small and Hartford Healthcare
The main advantage of trading using opposite Hartford Small and Hartford Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Small position performs unexpectedly, Hartford Healthcare 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 Hartford Healthcare will offset losses from the drop in Hartford Healthcare's long position.| Hartford Small vs. Versus Capital Multi Manager | Hartford Small vs. Forum Real Estate | Hartford Small vs. John Hancock Variable | Hartford Small vs. Heitman Real Estate |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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