Correlation Between Hartford Healthcare and The Hartford

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

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

Diversification Opportunities for Hartford Healthcare and The Hartford

0.74

Correlation Coefficient

Hartford Healthcare  The Hartford

Poor diversification

The 3 months correlation between Hartford and The is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls and The Hartford Servative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Servative and Hartford Healthcare 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 Hartford Healthcare Hls 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 The Hartford Servative has no effect on the direction of Hartford Healthcare i.e., Hartford Healthcare and The Hartford go up and down completely randomly.

Pair Corralation between Hartford Healthcare and The Hartford

Assuming the 90 days horizon Hartford Healthcare Hls is expected to generate 2.36 times more return on investment than The Hartford. However, Hartford Healthcare is 2.36 times more volatile than The Hartford Servative. It trades about 0.05 of its potential returns per unit of risk. The Hartford Servative is currently generating about 0.08 per unit of risk. If you would invest  1,622  in Hartford Healthcare Hls on December 19, 2024 and sell it today you would earn a total of  41.00  from holding Hartford Healthcare Hls or generate 2.53% return on investment over 90 days.

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

Hartford Healthcare Hls  vs.  The Hartford Servative

Hartford Healthcare Hls

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Healthcare Hls are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Hartford Healthcare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

The Hartford Servative

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Servative are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic 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 Hartford Healthcare and The Hartford

The main advantage of trading using opposite Hartford Healthcare and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Healthcare 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 Hartford Healthcare Hls and The Hartford Servative 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.