Correlation Between HCA Healthcare and Bellevue Healthcare
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Bellevue Healthcare 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 Bellevue Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Bellevue Healthcare Trust, you can compare the effects of market volatilities on HCA Healthcare and Bellevue Healthcare 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 Bellevue Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Bellevue Healthcare.
Diversification Opportunities for HCA Healthcare and Bellevue Healthcare
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between HCA and Bellevue is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Bellevue Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Healthcare Trust 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 Bellevue Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Healthcare Trust has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Bellevue Healthcare go up and down completely randomly.
Pair Corralation between HCA Healthcare and Bellevue Healthcare
Assuming the 90 days trading horizon HCA Healthcare is expected to under-perform the Bellevue Healthcare. In addition to that, HCA Healthcare is 1.6 times more volatile than Bellevue Healthcare Trust. It trades about -0.02 of its total potential returns per unit of risk. Bellevue Healthcare Trust is currently generating about -0.02 per unit of volatility. If you would invest 15,080 in Bellevue Healthcare Trust on November 7, 2024 and sell it today you would lose (420.00) from holding Bellevue Healthcare Trust or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
HCA Healthcare vs. Bellevue Healthcare Trust
Performance |
| Timeline |
| HCA Healthcare |
| Bellevue Healthcare Trust |
HCA Healthcare and Bellevue Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Bellevue Healthcare
The main advantage of trading using opposite HCA Healthcare and Bellevue Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Bellevue Healthcare 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 Bellevue Healthcare will offset losses from the drop in Bellevue Healthcare's long position.| HCA Healthcare vs. Samsung Electronics Co | HCA Healthcare vs. Samsung Electronics Co | HCA Healthcare vs. Toyota Motor Corp | HCA Healthcare vs. Reliance Industries Ltd |
| Bellevue Healthcare vs. Eastman Chemical Co | Bellevue Healthcare vs. MTI Wireless Edge | Bellevue Healthcare vs. Mineral Financial Investments | Bellevue Healthcare vs. New Residential Investment |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |