Correlation Between HCA Healthcare and Iron Mountain
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Iron Mountain 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 Iron Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Iron Mountain, you can compare the effects of market volatilities on HCA Healthcare and Iron Mountain 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 Iron Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Iron Mountain.
Diversification Opportunities for HCA Healthcare and Iron Mountain
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between HCA and Iron is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Iron Mountain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain 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 Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Iron Mountain go up and down completely randomly.
Pair Corralation between HCA Healthcare and Iron Mountain
Assuming the 90 days trading horizon HCA Healthcare is expected to under-perform the Iron Mountain. In addition to that, HCA Healthcare is 1.02 times more volatile than Iron Mountain. It trades about -0.23 of its total potential returns per unit of risk. Iron Mountain is currently generating about -0.06 per unit of volatility. If you would invest 12,063 in Iron Mountain on September 13, 2024 and sell it today you would lose (714.00) from holding Iron Mountain or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCA Healthcare vs. Iron Mountain
Performance |
| Timeline |
| HCA Healthcare |
| Iron Mountain |
HCA Healthcare and Iron Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Iron Mountain
The main advantage of trading using opposite HCA Healthcare and Iron Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Iron Mountain 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 Iron Mountain will offset losses from the drop in Iron Mountain's long position.| HCA Healthcare vs. International Consolidated Airlines | HCA Healthcare vs. United Airlines Holdings | HCA Healthcare vs. Monster Beverage Corp | HCA Healthcare vs. Teradata Corp |
| Iron Mountain vs. Mindflair Plc | Iron Mountain vs. Cardinal Health | Iron Mountain vs. HCA Healthcare | Iron Mountain vs. Pentair PLC |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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