Correlation Between HCA Healthcare and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and EVS Broadcast 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 EVS Broadcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and EVS Broadcast Equipment, you can compare the effects of market volatilities on HCA Healthcare and EVS Broadcast 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 EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and EVS Broadcast.
Diversification Opportunities for HCA Healthcare and EVS Broadcast
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HCA and EVS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment 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 EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and EVS Broadcast go up and down completely randomly.
Pair Corralation between HCA Healthcare and EVS Broadcast
Assuming the 90 days trading horizon HCA Healthcare is expected to generate 5.87 times more return on investment than EVS Broadcast. However, HCA Healthcare is 5.87 times more volatile than EVS Broadcast Equipment. It trades about 0.03 of its potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.06 per unit of risk. If you would invest 24,873 in HCA Healthcare on October 16, 2024 and sell it today you would earn a total of 5,240 from holding HCA Healthcare or generate 21.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.79% |
| Values | Daily Returns |
HCA Healthcare vs. EVS Broadcast Equipment
Performance |
| Timeline |
| HCA Healthcare |
| EVS Broadcast Equipment |
HCA Healthcare and EVS Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and EVS Broadcast
The main advantage of trading using opposite HCA Healthcare and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, EVS Broadcast 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 EVS Broadcast will offset losses from the drop in EVS Broadcast's long position.| HCA Healthcare vs. Vietnam Enterprise Investments | HCA Healthcare vs. Chrysalis Investments | HCA Healthcare vs. Livermore Investments Group | HCA Healthcare vs. Young Cos Brewery |
| EVS Broadcast vs. First Class Metals | EVS Broadcast vs. HCA Healthcare | EVS Broadcast vs. Gaztransport et Technigaz | EVS Broadcast vs. Sovereign Metals |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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