Correlation Between HCA Healthcare and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Naturhouse Health 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 Naturhouse Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Naturhouse Health SA, you can compare the effects of market volatilities on HCA Healthcare and Naturhouse Health 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 Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Naturhouse Health.
Diversification Opportunities for HCA Healthcare and Naturhouse Health
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between HCA and Naturhouse is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health 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 Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Naturhouse Health go up and down completely randomly.
Pair Corralation between HCA Healthcare and Naturhouse Health
Assuming the 90 days trading horizon HCA Healthcare is expected to generate 1.88 times more return on investment than Naturhouse Health. However, HCA Healthcare is 1.88 times more volatile than Naturhouse Health SA. It trades about 0.03 of its potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.03 per unit of risk. If you would invest 24,300 in HCA Healthcare on September 25, 2024 and sell it today you would earn a total of 5,813 from holding HCA Healthcare or generate 23.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.87% |
| Values | Daily Returns |
HCA Healthcare vs. Naturhouse Health SA
Performance |
| Timeline |
| HCA Healthcare |
| Naturhouse Health |
HCA Healthcare and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Naturhouse Health
The main advantage of trading using opposite HCA Healthcare and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Naturhouse Health 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 Naturhouse Health will offset losses from the drop in Naturhouse Health'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 |
| Naturhouse Health vs. Uniper SE | Naturhouse Health vs. Mulberry Group PLC | Naturhouse Health vs. London Security Plc | Naturhouse Health vs. Triad Group PLC |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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