Correlation Between HCA Healthcare and Thor Industries
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Thor Industries 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 Thor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Thor Industries, you can compare the effects of market volatilities on HCA Healthcare and Thor Industries 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 Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Thor Industries.
Diversification Opportunities for HCA Healthcare and Thor Industries
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between HCA and Thor is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries 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 Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Thor Industries go up and down completely randomly.
Pair Corralation between HCA Healthcare and Thor Industries
Assuming the 90 days trading horizon HCA Healthcare is expected to under-perform the Thor Industries. But the stock apears to be less risky and, when comparing its historical volatility, HCA Healthcare is 1.42 times less risky than Thor Industries. The stock trades about -0.03 of its potential returns per unit of risk. The Thor Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,914 in Thor Industries on September 19, 2024 and sell it today you would earn a total of 1,422 from holding Thor Industries or generate 15.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.63% |
| Values | Daily Returns |
HCA Healthcare vs. Thor Industries
Performance |
| Timeline |
| HCA Healthcare |
| Thor Industries |
HCA Healthcare and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Thor Industries
The main advantage of trading using opposite HCA Healthcare and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Thor Industries 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 Thor Industries will offset losses from the drop in Thor Industries' long position.| HCA Healthcare vs. Samsung Electronics Co | HCA Healthcare vs. Samsung Electronics Co | HCA Healthcare vs. Hyundai Motor | HCA Healthcare vs. Reliance Industries Ltd |
| Thor Industries vs. L3Harris Technologies | Thor Industries vs. Worldwide Healthcare Trust | Thor Industries vs. Bellevue Healthcare Trust | Thor Industries vs. HCA Healthcare |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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