Correlation Between AECOM TECHNOLOGY and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY 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 AECOM TECHNOLOGY and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and HCA Healthcare, you can compare the effects of market volatilities on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and HCA Healthcare.
Diversification Opportunities for AECOM TECHNOLOGY and HCA Healthcare
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AECOM and HCA is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and HCA Healthcare go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and HCA Healthcare
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 1.66 times more return on investment than HCA Healthcare. However, AECOM TECHNOLOGY is 1.66 times more volatile than HCA Healthcare. It trades about 0.27 of its potential returns per unit of risk. HCA Healthcare is currently generating about -0.15 per unit of risk. If you would invest 9,650 in AECOM TECHNOLOGY on August 29, 2024 and sell it today you would earn a total of 1,450 from holding AECOM TECHNOLOGY or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AECOM TECHNOLOGY vs. HCA Healthcare
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| HCA Healthcare |
AECOM TECHNOLOGY and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and HCA Healthcare
The main advantage of trading using opposite AECOM TECHNOLOGY and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY 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.| AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Superior Plus Corp | AECOM TECHNOLOGY 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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