Correlation Between HCA Healthcare and Comerica
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Comerica 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 Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Comerica, you can compare the effects of market volatilities on HCA Healthcare and Comerica 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 Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Comerica.
Diversification Opportunities for HCA Healthcare and Comerica
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HCA and Comerica is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica 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 Comerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comerica has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Comerica go up and down completely randomly.
Pair Corralation between HCA Healthcare and Comerica
Assuming the 90 days trading horizon HCA Healthcare is expected to under-perform the Comerica. But the stock apears to be less risky and, when comparing its historical volatility, HCA Healthcare is 1.68 times less risky than Comerica. The stock trades about -0.29 of its potential returns per unit of risk. The Comerica is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 6,290 in Comerica on September 2, 2024 and sell it today you would earn a total of 918.00 from holding Comerica or generate 14.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
HCA Healthcare vs. Comerica
Performance |
| Timeline |
| HCA Healthcare |
| Comerica |
HCA Healthcare and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Comerica
The main advantage of trading using opposite HCA Healthcare and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Comerica 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 Comerica will offset losses from the drop in Comerica's long position.| HCA Healthcare vs. Uniper SE | HCA Healthcare vs. Mulberry Group PLC | HCA Healthcare vs. London Security Plc | HCA Healthcare vs. Triad Group PLC |
| Comerica vs. Inspiration Healthcare Group | Comerica vs. Aeorema Communications Plc | Comerica vs. HCA Healthcare | Comerica vs. Spire Healthcare Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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