Correlation Between DATANG INTL and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both DATANG INTL 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 DATANG INTL and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DATANG INTL POW and HCA Healthcare, you can compare the effects of market volatilities on DATANG INTL 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 DATANG INTL with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATANG INTL and HCA Healthcare.
Diversification Opportunities for DATANG INTL and HCA Healthcare
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between DATANG and HCA is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding DATANG INTL POW and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and DATANG INTL 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 DATANG INTL POW 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 DATANG INTL i.e., DATANG INTL and HCA Healthcare go up and down completely randomly.
Pair Corralation between DATANG INTL and HCA Healthcare
Assuming the 90 days trading horizon DATANG INTL POW is expected to generate 2.67 times more return on investment than HCA Healthcare. However, DATANG INTL is 2.67 times more volatile than HCA Healthcare. It trades about 0.04 of its potential returns per unit of risk. HCA Healthcare is currently generating about 0.05 per unit of risk. If you would invest 11.00 in DATANG INTL POW on August 29, 2024 and sell it today you would earn a total of 5.00 from holding DATANG INTL POW or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DATANG INTL POW vs. HCA Healthcare
Performance |
| Timeline |
| DATANG INTL POW |
| HCA Healthcare |
DATANG INTL and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATANG INTL and HCA Healthcare
The main advantage of trading using opposite DATANG INTL and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATANG INTL 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.| DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Superior Plus Corp | DATANG INTL vs. SIVERS SEMICONDUCTORS AB |
| HCA Healthcare vs. AECOM TECHNOLOGY | HCA Healthcare vs. JAPAN TOBACCO UNSPADR12 | HCA Healthcare vs. Scandinavian Tobacco Group | HCA Healthcare vs. BRIT AMER TOBACCO |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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