Correlation Between Health Care and The Hartford
Can any of the company-specific risk be diversified away by investing in both Health Care 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 Health Care and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health Care Fund and The Hartford Growth, you can compare the effects of market volatilities on Health Care 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 Health Care with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Care and The Hartford.
Diversification Opportunities for Health Care and The Hartford
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Health and The is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Health Care Fund and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Health Care 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 Health Care Fund 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 Health Care i.e., Health Care and The Hartford go up and down completely randomly.
Pair Corralation between Health Care and The Hartford
Assuming the 90 days horizon Health Care Fund is expected to generate 0.53 times more return on investment than The Hartford. However, Health Care Fund is 1.9 times less risky than The Hartford. It trades about 0.33 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 2,896 in Health Care Fund on November 4, 2024 and sell it today you would earn a total of 156.00 from holding Health Care Fund or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health Care Fund vs. The Hartford Growth
Performance |
| Timeline |
| Health Care Fund |
| Hartford Growth |
Health Care and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health Care and The Hartford
The main advantage of trading using opposite Health Care and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Care 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.| Health Care vs. Ab Global Bond | Health Care vs. Morningstar Global Income | Health Care vs. Wisdomtree Siegel Global | Health Care vs. Ms Global Fixed |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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