Correlation Between HCA Healthcare and Anglesey Mining
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Anglesey Mining 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 Anglesey Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Anglesey Mining, you can compare the effects of market volatilities on HCA Healthcare and Anglesey Mining 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 Anglesey Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Anglesey Mining.
Diversification Opportunities for HCA Healthcare and Anglesey Mining
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HCA and Anglesey is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Anglesey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglesey Mining 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 Anglesey Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglesey Mining has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Anglesey Mining go up and down completely randomly.
Pair Corralation between HCA Healthcare and Anglesey Mining
Assuming the 90 days trading horizon HCA Healthcare is expected to generate 2.09 times more return on investment than Anglesey Mining. However, HCA Healthcare is 2.09 times more volatile than Anglesey Mining. It trades about 0.04 of its potential returns per unit of risk. Anglesey Mining is currently generating about -0.03 per unit of risk. If you would invest 23,572 in HCA Healthcare on August 30, 2024 and sell it today you would earn a total of 9,134 from holding HCA Healthcare or generate 38.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.99% |
| Values | Daily Returns |
HCA Healthcare vs. Anglesey Mining
Performance |
| Timeline |
| HCA Healthcare |
| Anglesey Mining |
HCA Healthcare and Anglesey Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Anglesey Mining
The main advantage of trading using opposite HCA Healthcare and Anglesey Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Anglesey Mining 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 Anglesey Mining will offset losses from the drop in Anglesey Mining's long position.| HCA Healthcare vs. Lendinvest PLC | HCA Healthcare vs. Neometals | HCA Healthcare vs. Albion Technology General | HCA Healthcare vs. Jupiter Fund Management |
| Anglesey Mining vs. Pfeiffer Vacuum Technology | Anglesey Mining vs. Spirent Communications plc | Anglesey Mining vs. International Biotechnology Trust | Anglesey Mining vs. Universal Music Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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