Correlation Between Vanguard Health and Hartford Healthcare
Can any of the company-specific risk be diversified away by investing in both Vanguard Health 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 Vanguard Health and Hartford Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Health Care and The Hartford Healthcare, you can compare the effects of market volatilities on Vanguard Health 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 Vanguard Health with a short position of Hartford Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and Hartford Healthcare.
Diversification Opportunities for Vanguard Health and Hartford Healthcare
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Hartford is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care 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 Vanguard 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 Vanguard Health Care 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 The Hartford Healthcare has no effect on the direction of Vanguard Health i.e., Vanguard Health and Hartford Healthcare go up and down completely randomly.
Pair Corralation between Vanguard Health and Hartford Healthcare
Assuming the 90 days horizon Vanguard Health Care is expected to generate 0.66 times more return on investment than Hartford Healthcare. However, Vanguard Health Care is 1.52 times less risky than Hartford Healthcare. It trades about -0.13 of its potential returns per unit of risk. The Hartford Healthcare is currently generating about -0.24 per unit of risk. If you would invest 9,066 in Vanguard Health Care on September 13, 2024 and sell it today you would lose (229.00) from holding Vanguard Health Care or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Health Care vs. The Hartford Healthcare
Performance |
| Timeline |
| Vanguard Health Care |
| The Hartford Healthcare |
Vanguard Health and Hartford Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Health and Hartford Healthcare
The main advantage of trading using opposite Vanguard Health and Hartford Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health 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.| Vanguard Health vs. Huber Capital Equity | Vanguard Health vs. Touchstone International Equity | Vanguard Health vs. Locorr Dynamic Equity | Vanguard Health vs. Balanced Fund Retail |
| Hartford Healthcare vs. The Hartford Growth | Hartford Healthcare vs. The Hartford Growth | Hartford Healthcare vs. The Hartford Growth | Hartford Healthcare 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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