Correlation Between HCA Healthcare, and Bread Financial
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare, and Bread Financial 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 Bread Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare, and Bread Financial Holdings, you can compare the effects of market volatilities on HCA Healthcare, and Bread Financial 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 Bread Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare, and Bread Financial.
Diversification Opportunities for HCA Healthcare, and Bread Financial
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HCA and Bread is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare, and Bread Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bread Financial Holdings 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 Bread Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bread Financial Holdings has no effect on the direction of HCA Healthcare, i.e., HCA Healthcare, and Bread Financial go up and down completely randomly.
Pair Corralation between HCA Healthcare, and Bread Financial
Assuming the 90 days trading horizon HCA Healthcare, is expected to generate 1.07 times more return on investment than Bread Financial. However, HCA Healthcare, is 1.07 times more volatile than Bread Financial Holdings. It trades about 0.05 of its potential returns per unit of risk. Bread Financial Holdings is currently generating about -0.3 per unit of risk. If you would invest 9,387 in HCA Healthcare, on October 11, 2024 and sell it today you would earn a total of 103.00 from holding HCA Healthcare, or generate 1.1% 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. Bread Financial Holdings
Performance |
| Timeline |
| HCA Healthcare, |
| Bread Financial Holdings |
HCA Healthcare, and Bread Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare, and Bread Financial
The main advantage of trading using opposite HCA Healthcare, and Bread Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare, position performs unexpectedly, Bread Financial 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 Bread Financial will offset losses from the drop in Bread Financial's long position.| HCA Healthcare, vs. Bread Financial Holdings | HCA Healthcare, vs. Citizens Financial Group, | HCA Healthcare, vs. Zoom Video Communications | HCA Healthcare, vs. Mitsubishi UFJ Financial |
| Bread Financial vs. Capital One Financial | Bread Financial vs. Bank of America | Bread Financial vs. Synchrony Financial | Bread Financial vs. Truist Financial |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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