Correlation Between Hartford Healthcare and Salient International

Can any of the company-specific risk be diversified away by investing in both Hartford Healthcare and Salient International 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 Salient International 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 Salient International Real, you can compare the effects of market volatilities on Hartford Healthcare and Salient International 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 Salient International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Healthcare and Salient International.

Diversification Opportunities for Hartford Healthcare and Salient International

0.83

Correlation Coefficient

Hartford Healthcare  Salient International

Very poor diversification

The 3 months correlation between Hartford and Salient is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls and Salient International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient International 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 Salient International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient International has no effect on the direction of Hartford Healthcare i.e., Hartford Healthcare and Salient International go up and down completely randomly.

Pair Corralation between Hartford Healthcare and Salient International

Assuming the 90 days horizon Hartford Healthcare Hls is expected to generate 0.82 times more return on investment than Salient International. However, Hartford Healthcare Hls is 1.21 times less risky than Salient International. It trades about 0.02 of its potential returns per unit of risk. Salient International Real is currently generating about 0.01 per unit of risk. If you would invest  1,594  in Hartford Healthcare Hls on October 11, 2024 and sell it today you would earn a total of  73.00  from holding Hartford Healthcare Hls or generate 4.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Hartford Healthcare Hls  vs.  Salient International Real

Hartford Healthcare Hls

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hartford Healthcare Hls has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Salient International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Salient International Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Hartford Healthcare and Salient International

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

The idea behind Hartford Healthcare Hls and Salient International Real 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.