Correlation Between HCA Healthcare and Alior Bank
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Alior Bank 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 Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Alior Bank SA, you can compare the effects of market volatilities on HCA Healthcare and Alior Bank 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 Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Alior Bank.
Diversification Opportunities for HCA Healthcare and Alior Bank
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HCA and Alior is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Alior Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alior Bank 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 Alior Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alior Bank SA has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Alior Bank go up and down completely randomly.
Pair Corralation between HCA Healthcare and Alior Bank
Assuming the 90 days trading horizon HCA Healthcare is expected to generate 1.49 times more return on investment than Alior Bank. However, HCA Healthcare is 1.49 times more volatile than Alior Bank SA. It trades about 0.04 of its potential returns per unit of risk. Alior Bank SA is currently generating about 0.01 per unit of risk. If you would invest 27,123 in HCA Healthcare on August 31, 2024 and sell it today you would earn a total of 5,440 from holding HCA Healthcare or generate 20.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
HCA Healthcare vs. Alior Bank SA
Performance |
| Timeline |
| HCA Healthcare |
| Alior Bank SA |
HCA Healthcare and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Alior Bank
The main advantage of trading using opposite HCA Healthcare and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Alior Bank 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 Alior Bank will offset losses from the drop in Alior Bank's long position.| HCA Healthcare vs. Neometals | HCA Healthcare vs. Coor Service Management | HCA Healthcare vs. Aeorema Communications Plc | HCA Healthcare vs. JLEN Environmental Assets |
| Alior Bank vs. HCA Healthcare | Alior Bank vs. X FAB Silicon Foundries | Alior Bank vs. Cairn Homes PLC | Alior Bank vs. Air Products Chemicals |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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