Correlation Between Hartford Healthcare and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Hartford Healthcare and Icon 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 Hartford Healthcare and Icon Financial 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 Icon Financial Fund, you can compare the effects of market volatilities on Hartford Healthcare and Icon 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 Hartford Healthcare with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Healthcare and Icon Financial.
Diversification Opportunities for Hartford Healthcare and Icon Financial
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartford and Icon is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial 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 Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of Hartford Healthcare i.e., Hartford Healthcare and Icon Financial go up and down completely randomly.
Pair Corralation between Hartford Healthcare and Icon Financial
Assuming the 90 days horizon Hartford Healthcare Hls is expected to generate 0.42 times more return on investment than Icon Financial. However, Hartford Healthcare Hls is 2.37 times less risky than Icon Financial. It trades about -0.1 of its potential returns per unit of risk. Icon Financial Fund is currently generating about -0.07 per unit of risk. If you would invest 1,782 in Hartford Healthcare Hls on October 25, 2024 and sell it today you would lose (93.00) from holding Hartford Healthcare Hls or give up 5.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hartford Healthcare Hls vs. Icon Financial Fund
Performance |
Timeline |
Hartford Healthcare Hls |
Icon Financial |
Hartford Healthcare and Icon Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hartford Healthcare and Icon Financial
The main advantage of trading using opposite Hartford Healthcare and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Healthcare position performs unexpectedly, Icon 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 Icon Financial will offset losses from the drop in Icon Financial's long position.Hartford Healthcare vs. Qs Global Equity | Hartford Healthcare vs. Investec Global Franchise | Hartford Healthcare vs. Morningstar Global Income | Hartford Healthcare vs. Gmo Global Equity |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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