Correlation Between Lord Abbett and Hartford Healthcare
Can any of the company-specific risk be diversified away by investing in both Lord Abbett 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 Lord Abbett and Hartford Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Health and Hartford Healthcare Hls, you can compare the effects of market volatilities on Lord Abbett 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 Lord Abbett with a short position of Hartford Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Hartford Healthcare.
Diversification Opportunities for Lord Abbett and Hartford Healthcare
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and HARTFORD is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Health 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 Lord Abbett 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 Lord Abbett Health 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 Lord Abbett i.e., Lord Abbett and Hartford Healthcare go up and down completely randomly.
Pair Corralation between Lord Abbett and Hartford Healthcare
Assuming the 90 days horizon Lord Abbett is expected to generate 1.5 times less return on investment than Hartford Healthcare. In addition to that, Lord Abbett is 1.24 times more volatile than Hartford Healthcare Hls. It trades about 0.07 of its total potential returns per unit of risk. Hartford Healthcare Hls is currently generating about 0.12 per unit of volatility. If you would invest 1,453 in Hartford Healthcare Hls on October 25, 2024 and sell it today you would earn a total of 28.00 from holding Hartford Healthcare Hls or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Health vs. Hartford Healthcare Hls
Performance |
| Timeline |
| Lord Abbett Health |
| Hartford Healthcare Hls |
Lord Abbett and Hartford Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Hartford Healthcare
The main advantage of trading using opposite Lord Abbett and Hartford Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett 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.| Lord Abbett vs. Heartland Value Plus | Lord Abbett vs. Small Cap Value | Lord Abbett vs. Fidelity Small Cap | Lord Abbett vs. William Blair Small |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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