Correlation Between Vinci SA and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both Vinci SA and HCA 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 Vinci SA and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vinci SA and HCA Healthcare, you can compare the effects of market volatilities on Vinci SA and HCA 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 Vinci SA with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinci SA and HCA Healthcare.
Diversification Opportunities for Vinci SA and HCA Healthcare
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vinci and HCA is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Vinci SA and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and Vinci SA 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 Vinci SA are associated (or correlated) with HCA Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCA Healthcare has no effect on the direction of Vinci SA i.e., Vinci SA and HCA Healthcare go up and down completely randomly.
Pair Corralation between Vinci SA and HCA Healthcare
Assuming the 90 days trading horizon Vinci SA is expected to generate 5.89 times less return on investment than HCA Healthcare. But when comparing it to its historical volatility, Vinci SA is 4.3 times less risky than HCA Healthcare. It trades about 0.03 of its potential returns per unit of risk. HCA Healthcare is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 23,736 in HCA Healthcare on September 13, 2024 and sell it today you would earn a total of 7,968 from holding HCA Healthcare or generate 33.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.8% |
| Values | Daily Returns |
Vinci SA vs. HCA Healthcare
Performance |
| Timeline |
| Vinci SA |
| HCA Healthcare |
Vinci SA and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vinci SA and HCA Healthcare
The main advantage of trading using opposite Vinci SA and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinci SA position performs unexpectedly, HCA 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 HCA Healthcare will offset losses from the drop in HCA Healthcare's long position.| Vinci SA vs. HCA Healthcare | Vinci SA vs. Abingdon Health Plc | Vinci SA vs. Komercni Banka | Vinci SA vs. PureTech Health plc |
| HCA Healthcare vs. International Consolidated Airlines | HCA Healthcare vs. United Airlines Holdings | HCA Healthcare vs. Monster Beverage Corp | HCA Healthcare vs. Teradata Corp |
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.
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