Correlation Between Deutsche Health and The Hartford
Can any of the company-specific risk be diversified away by investing in both Deutsche 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 Deutsche 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 Deutsche Health And and The Hartford Healthcare, you can compare the effects of market volatilities on Deutsche 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 Deutsche Health with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Health and The Hartford.
Diversification Opportunities for Deutsche Health and The Hartford
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Deutsche and The is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Health And and The Hartford Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Healthcare and Deutsche 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 Deutsche Health And 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 The Hartford Healthcare has no effect on the direction of Deutsche Health i.e., Deutsche Health and The Hartford go up and down completely randomly.
Pair Corralation between Deutsche Health and The Hartford
Assuming the 90 days horizon Deutsche Health And is expected to generate 0.89 times more return on investment than The Hartford. However, Deutsche Health And is 1.13 times less risky than The Hartford. It trades about -0.17 of its potential returns per unit of risk. The Hartford Healthcare is currently generating about -0.22 per unit of risk. If you would invest 4,428 in Deutsche Health And on August 28, 2024 and sell it today you would lose (135.00) from holding Deutsche Health And or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Health And vs. The Hartford Healthcare
Performance |
| Timeline |
| Deutsche Health And |
| The Hartford Healthcare |
Deutsche Health and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Health and The Hartford
The main advantage of trading using opposite Deutsche Health and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche 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.| Deutsche Health vs. Western Assets Emerging | Deutsche Health vs. Origin Emerging Markets | Deutsche Health vs. Ashmore Emerging Markets | Deutsche Health vs. Investec Emerging Markets |
| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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