Correlation Between Sierra Core and Hartford Healthcare
Can any of the company-specific risk be diversified away by investing in both Sierra Core 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 Sierra Core and Hartford Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sierra E Retirement and Hartford Healthcare Hls, you can compare the effects of market volatilities on Sierra Core 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 Sierra Core with a short position of Hartford Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sierra Core and Hartford Healthcare.
Diversification Opportunities for Sierra Core and Hartford Healthcare
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sierra and Hartford is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sierra E Retirement 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 Sierra Core 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 Sierra E Retirement 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 Sierra Core i.e., Sierra Core and Hartford Healthcare go up and down completely randomly.
Pair Corralation between Sierra Core and Hartford Healthcare
Assuming the 90 days horizon Sierra Core is expected to generate 3.2 times less return on investment than Hartford Healthcare. But when comparing it to its historical volatility, Sierra E Retirement is 2.39 times less risky than Hartford Healthcare. It trades about 0.2 of its potential returns per unit of risk. Hartford Healthcare Hls is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,462 in Hartford Healthcare Hls on November 8, 2024 and sell it today you would earn a total of 73.00 from holding Hartford Healthcare Hls or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sierra E Retirement vs. Hartford Healthcare Hls
Performance |
| Timeline |
| Sierra E Retirement |
| Hartford Healthcare Hls |
Sierra Core and Hartford Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sierra Core and Hartford Healthcare
The main advantage of trading using opposite Sierra Core and Hartford Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sierra Core 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.| Sierra Core vs. Voya Government Money | Sierra Core vs. John Hancock Money | Sierra Core vs. Hsbc Treasury Money | Sierra Core vs. Chestnut Street Exchange |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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