Correlation Between HCA Healthcare and Uniper SE
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Uniper SE 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 Uniper SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Uniper SE, you can compare the effects of market volatilities on HCA Healthcare and Uniper SE 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 Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Uniper SE.
Diversification Opportunities for HCA Healthcare and Uniper SE
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HCA and Uniper is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE 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 Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Uniper SE go up and down completely randomly.
Pair Corralation between HCA Healthcare and Uniper SE
Assuming the 90 days trading horizon HCA Healthcare is expected to under-perform the Uniper SE. But the stock apears to be less risky and, when comparing its historical volatility, HCA Healthcare is 2.05 times less risky than Uniper SE. The stock trades about -0.36 of its potential returns per unit of risk. The Uniper SE is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 4,140 in Uniper SE on September 27, 2024 and sell it today you would lose (253.00) from holding Uniper SE or give up 6.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCA Healthcare vs. Uniper SE
Performance |
| Timeline |
| HCA Healthcare |
| Uniper SE |
HCA Healthcare and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Uniper SE
The main advantage of trading using opposite HCA Healthcare and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE'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 |
| Uniper SE vs. Mulberry Group PLC | Uniper SE vs. London Security Plc | Uniper SE vs. Triad Group PLC | Uniper SE vs. SURETRACK MON |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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