Correlation Between Prudential Health and The Hartford
Can any of the company-specific risk be diversified away by investing in both Prudential Health and The Hartford 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 Prudential Health and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Health Sciences and The Hartford Growth, you can compare the effects of market volatilities on Prudential Health and The Hartford 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 Prudential Health with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Health and The Hartford.
Diversification Opportunities for Prudential Health and The Hartford
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prudential and The is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Health Sciences and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Prudential Health 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 Prudential Health Sciences are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Prudential Health i.e., Prudential Health and The Hartford go up and down completely randomly.
Pair Corralation between Prudential Health and The Hartford
Assuming the 90 days horizon Prudential Health Sciences is expected to generate 0.7 times more return on investment than The Hartford. However, Prudential Health Sciences is 1.42 times less risky than The Hartford. It trades about 0.14 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.04 per unit of risk. If you would invest 3,178 in Prudential Health Sciences on November 4, 2024 and sell it today you would earn a total of 98.00 from holding Prudential Health Sciences or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Health Sciences vs. The Hartford Growth
Performance |
| Timeline |
| Prudential Health |
| Hartford Growth |
Prudential Health and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Health and The Hartford
The main advantage of trading using opposite Prudential Health and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Health position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Prudential Health vs. Issachar Fund Class | Prudential Health vs. Delaware Limited Term Diversified | Prudential Health vs. Stone Ridge Diversified | Prudential Health vs. Jhancock Diversified Macro |
| The Hartford vs. Rbb Fund | The Hartford vs. Mirova Global Green | The Hartford vs. Gmo Global Equity | The Hartford vs. Scharf Global Opportunity |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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