Correlation Between Hartford Healthcare and Voya Real

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

Diversification Opportunities for Hartford Healthcare and Voya Real

0.75

Correlation Coefficient

Hartford Healthcare  Voya Real

Poor diversification

The 3 months correlation between Hartford and Voya is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Healthcare Hls and Voya Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Real Estate 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 Voya Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Real Estate has no effect on the direction of Hartford Healthcare i.e., Hartford Healthcare and Voya Real go up and down completely randomly.

Pair Corralation between Hartford Healthcare and Voya Real

Assuming the 90 days horizon Hartford Healthcare Hls is expected to under-perform the Voya Real. But the mutual fund apears to be less risky and, when comparing its historical volatility, Hartford Healthcare Hls is 1.07 times less risky than Voya Real. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Voya Real Estate is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  1,148  in Voya Real Estate on September 12, 2024 and sell it today you would lose (57.00) from holding Voya Real Estate or give up 4.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Hartford Healthcare Hls  vs.  Voya Real Estate

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.

Voya Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Voya Real 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 Voya Real

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

The idea behind Hartford Healthcare Hls and Voya Real Estate 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.