Correlation Between GLOBUS MEDICAL and Hartford Financial

Can any of the company-specific risk be diversified away by investing in both GLOBUS MEDICAL and Hartford Financial 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 GLOBUS MEDICAL and Hartford Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GLOBUS MEDICAL A and The Hartford Financial, you can compare the effects of market volatilities on GLOBUS MEDICAL and Hartford Financial 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 GLOBUS MEDICAL with a short position of Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBUS MEDICAL and Hartford Financial.

Diversification Opportunities for GLOBUS MEDICAL and Hartford Financial

0.3

Correlation Coefficient

GLOBUS MEDICAL  Hartford Financial

Weak diversification

The 3 months correlation between GLOBUS and Hartford is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding GLOBUS MEDICAL A and The Hartford Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Financial and GLOBUS MEDICAL 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 GLOBUS MEDICAL A are associated (or correlated) with Hartford Financial. 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 Financial has no effect on the direction of GLOBUS MEDICAL i.e., GLOBUS MEDICAL and Hartford Financial go up and down completely randomly.

Pair Corralation between GLOBUS MEDICAL and Hartford Financial

Assuming the 90 days trading horizon GLOBUS MEDICAL A is expected to generate 1.45 times more return on investment than Hartford Financial. However, GLOBUS MEDICAL is 1.45 times more volatile than The Hartford Financial. It trades about 0.21 of its potential returns per unit of risk. The Hartford Financial is currently generating about 0.02 per unit of risk. If you would invest  6,750  in GLOBUS MEDICAL A on October 26, 2024 and sell it today you would earn a total of  2,150  from holding GLOBUS MEDICAL A or generate 31.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

GLOBUS MEDICAL A  vs.  The Hartford Financial

GLOBUS MEDICAL A

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GLOBUS MEDICAL A are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GLOBUS MEDICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

The Hartford Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Hartford Financial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GLOBUS MEDICAL and Hartford Financial

The main advantage of trading using opposite GLOBUS MEDICAL and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBUS MEDICAL position performs unexpectedly, Hartford Financial 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 Financial will offset losses from the drop in Hartford Financial's long position.

The idea behind GLOBUS MEDICAL A and The Hartford Financial 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.