Correlation Between HCA Healthcare and Vinci SA
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Vinci SA 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 Vinci SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Vinci SA, you can compare the effects of market volatilities on HCA Healthcare and Vinci SA 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 Vinci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Vinci SA.
Diversification Opportunities for HCA Healthcare and Vinci SA
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HCA and Vinci is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Vinci SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci SA 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 Vinci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci SA has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Vinci SA go up and down completely randomly.
Pair Corralation between HCA Healthcare and Vinci SA
Assuming the 90 days trading horizon HCA Healthcare is expected to generate 1.41 times more return on investment than Vinci SA. However, HCA Healthcare is 1.41 times more volatile than Vinci SA. It trades about 0.0 of its potential returns per unit of risk. Vinci SA is currently generating about 0.0 per unit of risk. If you would invest 31,887 in HCA Healthcare on December 4, 2024 and sell it today you would lose (714.00) from holding HCA Healthcare or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.79% |
| Values | Daily Returns |
HCA Healthcare vs. Vinci SA
Performance |
| Timeline |
| HCA Healthcare |
| Vinci SA |
HCA Healthcare and Vinci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Vinci SA
The main advantage of trading using opposite HCA Healthcare and Vinci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Vinci SA 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 Vinci SA will offset losses from the drop in Vinci SA's long position.| HCA Healthcare vs. Aptitude Software Group | HCA Healthcare vs. Blackrock World Mining | HCA Healthcare vs. Vitec Software Group | HCA Healthcare vs. Invesco Physical Silver |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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