Correlation Between HCA Healthcare and Deltex Medical
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Deltex Medical 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 Deltex Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare and Deltex Medical Group, you can compare the effects of market volatilities on HCA Healthcare and Deltex Medical 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 Deltex Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Deltex Medical.
Diversification Opportunities for HCA Healthcare and Deltex Medical
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HCA and Deltex is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Deltex Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deltex Medical Group 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 Deltex Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deltex Medical Group has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Deltex Medical go up and down completely randomly.
Pair Corralation between HCA Healthcare and Deltex Medical
Assuming the 90 days trading horizon HCA Healthcare is expected to generate 1.69 times more return on investment than Deltex Medical. However, HCA Healthcare is 1.69 times more volatile than Deltex Medical Group. It trades about 0.03 of its potential returns per unit of risk. Deltex Medical Group is currently generating about -0.08 per unit of risk. If you would invest 25,335 in HCA Healthcare on September 3, 2024 and sell it today you would earn a total of 7,228 from holding HCA Healthcare or generate 28.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.37% |
| Values | Daily Returns |
HCA Healthcare vs. Deltex Medical Group
Performance |
| Timeline |
| HCA Healthcare |
| Deltex Medical Group |
HCA Healthcare and Deltex Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Deltex Medical
The main advantage of trading using opposite HCA Healthcare and Deltex Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Deltex Medical 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 Deltex Medical will offset losses from the drop in Deltex Medical's long position.| HCA Healthcare vs. Catalyst Media Group | HCA Healthcare vs. CATLIN GROUP | HCA Healthcare vs. Magnora ASA | HCA Healthcare vs. RTW Venture Fund |
| Deltex Medical vs. Walmart | Deltex Medical vs. Volkswagen AG | Deltex Medical vs. Deutsche Post AG | Deltex Medical vs. United Parcel Service |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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