Correlation Between HCA Healthcare and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare and Fresenius 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 Fresenius 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 Fresenius Medical Care, you can compare the effects of market volatilities on HCA Healthcare and Fresenius 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 Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare and Fresenius Medical.
Diversification Opportunities for HCA Healthcare and Fresenius Medical
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HCA and Fresenius is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care 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 Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Fresenius Medical go up and down completely randomly.
Pair Corralation between HCA Healthcare and Fresenius Medical
Assuming the 90 days horizon HCA Healthcare is expected to generate 1.47 times less return on investment than Fresenius Medical. But when comparing it to its historical volatility, HCA Healthcare is 1.52 times less risky than Fresenius Medical. It trades about 0.04 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,573 in Fresenius Medical Care on October 12, 2024 and sell it today you would earn a total of 587.00 from holding Fresenius Medical Care or generate 37.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCA Healthcare vs. Fresenius Medical Care
Performance |
| Timeline |
| HCA Healthcare |
| Fresenius Medical Care |
HCA Healthcare and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare and Fresenius Medical
The main advantage of trading using opposite HCA Healthcare and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Fresenius 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| HCA Healthcare vs. Phibro Animal Health | HCA Healthcare vs. Acadia Healthcare | HCA Healthcare vs. MOBILE FACTORY INC | HCA Healthcare vs. Molina Healthcare |
| Fresenius Medical vs. AM EAGLE OUTFITTERS | Fresenius Medical vs. Hemisphere Energy Corp | Fresenius Medical vs. Ribbon Communications | Fresenius Medical vs. GMO Internet |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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