Correlation Between HCA Healthcare, and Braskem SA
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare, and Braskem SA 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 Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare, and Braskem SA, you can compare the effects of market volatilities on HCA Healthcare, and Braskem SA 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 Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare, and Braskem SA.
Diversification Opportunities for HCA Healthcare, and Braskem SA
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HCA and Braskem is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare, and Braskem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braskem SA 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 Braskem SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braskem SA has no effect on the direction of HCA Healthcare, i.e., HCA Healthcare, and Braskem SA go up and down completely randomly.
Pair Corralation between HCA Healthcare, and Braskem SA
Assuming the 90 days trading horizon HCA Healthcare, is expected to generate 15.4 times less return on investment than Braskem SA. But when comparing it to its historical volatility, HCA Healthcare, is 2.89 times less risky than Braskem SA. It trades about 0.04 of its potential returns per unit of risk. Braskem SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,253 in Braskem SA on October 24, 2024 and sell it today you would earn a total of 167.00 from holding Braskem SA or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
HCA Healthcare, vs. Braskem SA
Performance |
| Timeline |
| HCA Healthcare, |
| Braskem SA |
HCA Healthcare, and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare, and Braskem SA
The main advantage of trading using opposite HCA Healthcare, and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare, position performs unexpectedly, Braskem SA 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 Braskem SA will offset losses from the drop in Braskem SA's long position.| HCA Healthcare, vs. Medical Properties Trust, | HCA Healthcare, vs. STMicroelectronics NV | HCA Healthcare, vs. Marfrig Global Foods | HCA Healthcare, vs. Fresenius Medical Care |
| Braskem SA vs. Verizon Communications | Braskem SA vs. Zoom Video Communications | Braskem SA vs. HCA Healthcare, | Braskem SA vs. Teladoc Health |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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