Correlation Between HCA Healthcare and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Schweiter Technologies 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 Schweiter Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Schweiter Technologies AG, you can compare the effects of market volatilities on HCA Healthcare and Schweiter Technologies 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 Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Schweiter Technologies.
Diversification Opportunities for HCA Healthcare and Schweiter Technologies
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between HCA and Schweiter is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies 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 Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Schweiter Technologies go up and down completely randomly.
Pair Corralation between HCA Healthcare and Schweiter Technologies
Assuming the 90 days trading horizon HCA Healthcare is expected to generate 4.51 times more return on investment than Schweiter Technologies. However, HCA Healthcare is 4.51 times more volatile than Schweiter Technologies AG. It trades about 0.04 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about -0.06 per unit of risk. If you would invest 23,280 in HCA Healthcare on August 26, 2024 and sell it today you would earn a total of 9,584 from holding HCA Healthcare or generate 41.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
HCA Healthcare vs. Schweiter Technologies AG
Performance |
| Timeline |
| HCA Healthcare |
| Schweiter Technologies |
HCA Healthcare and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Schweiter Technologies
The main advantage of trading using opposite HCA Healthcare and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Schweiter Technologies 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.| HCA Healthcare vs. Samsung Electronics Co | HCA Healthcare vs. Samsung Electronics Co | HCA Healthcare vs. Hyundai Motor | HCA Healthcare vs. Toyota Motor Corp |
| Schweiter Technologies vs. Samsung Electronics Co | Schweiter Technologies vs. Samsung Electronics Co | Schweiter Technologies vs. Hyundai Motor | Schweiter Technologies vs. Toyota Motor Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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