Correlation Between Alfa Financial and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both Alfa Financial 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 Alfa Financial and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and HCA Healthcare, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and HCA Healthcare.
Diversification Opportunities for Alfa Financial and HCA Healthcare
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alfa and HCA is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and HCA Healthcare go up and down completely randomly.
Pair Corralation between Alfa Financial and HCA Healthcare
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 0.94 times more return on investment than HCA Healthcare. However, Alfa Financial Software is 1.06 times less risky than HCA Healthcare. It trades about 0.14 of its potential returns per unit of risk. HCA Healthcare is currently generating about -0.21 per unit of risk. If you would invest 19,980 in Alfa Financial Software on August 30, 2024 and sell it today you would earn a total of 2,370 from holding Alfa Financial Software or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. HCA Healthcare
Performance |
| Timeline |
| Alfa Financial Software |
| HCA Healthcare |
Alfa Financial and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and HCA Healthcare
The main advantage of trading using opposite Alfa Financial and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.| Alfa Financial vs. Samsung Electronics Co | Alfa Financial vs. Samsung Electronics Co | Alfa Financial vs. Toyota Motor Corp | Alfa Financial vs. Reliance Industries Ltd |
| HCA Healthcare vs. Lendinvest PLC | HCA Healthcare vs. Neometals | HCA Healthcare vs. Albion Technology General | HCA Healthcare vs. Jupiter Fund Management |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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