Correlation Between Touchstone Small and Hartford Healthcare
Can any of the company-specific risk be diversified away by investing in both Touchstone Small 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 Touchstone Small and Hartford Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Small Cap and Hartford Healthcare Hls, you can compare the effects of market volatilities on Touchstone Small 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 Touchstone Small with a short position of Hartford Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Hartford Healthcare.
Diversification Opportunities for Touchstone Small and Hartford Healthcare
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Touchstone and Hartford is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap 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 Touchstone Small 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 Touchstone Small Cap 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 Touchstone Small i.e., Touchstone Small and Hartford Healthcare go up and down completely randomly.
Pair Corralation between Touchstone Small and Hartford Healthcare
Assuming the 90 days horizon Touchstone Small Cap is expected to under-perform the Hartford Healthcare. In addition to that, Touchstone Small is 1.42 times more volatile than Hartford Healthcare Hls. It trades about -0.14 of its total potential returns per unit of risk. Hartford Healthcare Hls is currently generating about -0.02 per unit of volatility. If you would invest 1,673 in Hartford Healthcare Hls on October 17, 2024 and sell it today you would lose (6.00) from holding Hartford Healthcare Hls or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Hartford Healthcare Hls
Performance |
| Timeline |
| Touchstone Small Cap |
| Hartford Healthcare Hls |
Touchstone Small and Hartford Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Hartford Healthcare
The main advantage of trading using opposite Touchstone Small and Hartford Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small 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.| Touchstone Small vs. Small Cap Equity | Touchstone Small vs. Old Westbury Fixed | Touchstone Small vs. Ab Equity Income | Touchstone Small vs. Dws Equity Sector |
| Hartford Healthcare vs. Vy Columbia Small | Hartford Healthcare vs. Lebenthal Lisanti Small | Hartford Healthcare vs. Franklin Small Cap | Hartford Healthcare vs. Touchstone Small Cap |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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