Correlation Between HCA Healthcare and Zoom Video
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Zoom Video 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 HCA Healthcare and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Zoom Video Communications, you can compare the effects of market volatilities on HCA Healthcare and Zoom Video 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 HCA Healthcare with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Zoom Video.
Diversification Opportunities for HCA Healthcare and Zoom Video
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HCA and Zoom is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications and HCA 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 HCA Healthcare are associated (or correlated) with Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Zoom Video go up and down completely randomly.
Pair Corralation between HCA Healthcare and Zoom Video
Assuming the 90 days trading horizon HCA Healthcare is expected to under-perform the Zoom Video. But the stock apears to be less risky and, when comparing its historical volatility, HCA Healthcare is 2.11 times less risky than Zoom Video. The stock trades about -0.31 of its potential returns per unit of risk. The Zoom Video Communications is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 7,530 in Zoom Video Communications on August 31, 2024 and sell it today you would earn a total of 1,007 from holding Zoom Video Communications or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCA Healthcare vs. Zoom Video Communications
Performance |
| Timeline |
| HCA Healthcare |
| Zoom Video Communications |
HCA Healthcare and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Zoom Video
The main advantage of trading using opposite HCA Healthcare and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video's long position.| HCA Healthcare vs. Neometals | HCA Healthcare vs. Coor Service Management | HCA Healthcare vs. Aeorema Communications Plc | HCA Healthcare vs. JLEN Environmental Assets |
| Zoom Video vs. Induction Healthcare Group | Zoom Video vs. Target Healthcare REIT | Zoom Video vs. HCA Healthcare | Zoom Video vs. Batm Advanced Communications |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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