Correlation Between Blackrock Health and The Hartford

Can any of the company-specific risk be diversified away by investing in both Blackrock 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 Blackrock 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 Blackrock Health Sciences and The Hartford Growth, you can compare the effects of market volatilities on Blackrock 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 Blackrock Health with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Health and The Hartford.

Diversification Opportunities for Blackrock Health and The Hartford

-0.18

Correlation Coefficient

Blackrock Health  The Hartford

Good diversification

The 3 months correlation between Blackrock and The is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Health Sciences and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth and Blackrock 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 Blackrock Health Sciences 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 Blackrock Health i.e., Blackrock Health and The Hartford go up and down completely randomly.

Pair Corralation between Blackrock Health and The Hartford

Assuming the 90 days horizon Blackrock Health Sciences is expected to under-perform the The Hartford. But the mutual fund apears to be less risky and, when comparing its historical volatility, Blackrock Health Sciences is 1.31 times less risky than The Hartford. The mutual fund trades about -0.07 of its potential returns per unit of risk. The The Hartford Growth is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  6,570  in The Hartford Growth on November 28, 2024 and sell it today you would lose (86.00) from holding The Hartford Growth or give up 1.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Blackrock Health Sciences  vs.  The Hartford Growth

Blackrock Health Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Health Sciences has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Blackrock Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hartford Growth

Risk-Adjusted Performance

Weak

Over the last 90 days The Hartford Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, The Hartford is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Health and The Hartford

The main advantage of trading using opposite Blackrock Health and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock 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.

The idea behind Blackrock Health Sciences and The Hartford Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.