Correlation Between HCA Healthcare and Gedeon Richter
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Gedeon Richter 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 Gedeon Richter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Gedeon Richter PLC, you can compare the effects of market volatilities on HCA Healthcare and Gedeon Richter 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 Gedeon Richter. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Gedeon Richter.
Diversification Opportunities for HCA Healthcare and Gedeon Richter
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HCA and Gedeon is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Gedeon Richter PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gedeon Richter PLC 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 Gedeon Richter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gedeon Richter PLC has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Gedeon Richter go up and down completely randomly.
Pair Corralation between HCA Healthcare and Gedeon Richter
Assuming the 90 days trading horizon HCA Healthcare is expected to under-perform the Gedeon Richter. But the stock apears to be less risky and, when comparing its historical volatility, HCA Healthcare is 16.71 times less risky than Gedeon Richter. The stock trades about -0.2 of its potential returns per unit of risk. The Gedeon Richter PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 504,000 in Gedeon Richter PLC on December 1, 2024 and sell it today you would earn a total of 0.00 from holding Gedeon Richter PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCA Healthcare vs. Gedeon Richter PLC
Performance |
| Timeline |
| HCA Healthcare |
| Gedeon Richter PLC |
HCA Healthcare and Gedeon Richter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Gedeon Richter
The main advantage of trading using opposite HCA Healthcare and Gedeon Richter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Gedeon Richter 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 Gedeon Richter will offset losses from the drop in Gedeon Richter's long position.| HCA Healthcare vs. International Consolidated Airlines | HCA Healthcare vs. Critical Metals Plc | HCA Healthcare vs. Dairy Farm International | HCA Healthcare vs. URU Metals |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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