Correlation Between HCA Healthcare and Alstria Office
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Alstria Office 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 Alstria Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and alstria office REIT AG, you can compare the effects of market volatilities on HCA Healthcare and Alstria Office 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 Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Alstria Office.
Diversification Opportunities for HCA Healthcare and Alstria Office
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HCA and Alstria is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Alstria Office go up and down completely randomly.
Pair Corralation between HCA Healthcare and Alstria Office
Assuming the 90 days trading horizon HCA Healthcare is expected to under-perform the Alstria Office. But the stock apears to be less risky and, when comparing its historical volatility, HCA Healthcare is 1.57 times less risky than Alstria Office. The stock trades about -0.31 of its potential returns per unit of risk. The alstria office REIT AG is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 700.00 in alstria office REIT AG on September 24, 2024 and sell it today you would earn a total of 61.00 from holding alstria office REIT AG or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCA Healthcare vs. alstria office REIT AG
Performance |
| Timeline |
| HCA Healthcare |
| alstria office REIT |
HCA Healthcare and Alstria Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Alstria Office
The main advantage of trading using opposite HCA Healthcare and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Alstria Office 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 Alstria Office will offset losses from the drop in Alstria Office'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 |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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