Correlation Between HCA Healthcare, and Hospital Mater
Can any of the company-specific risk be diversified away by investing in both HCA Healthcare, and Hospital Mater 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 Hospital Mater into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Healthcare, and Hospital Mater Dei, you can compare the effects of market volatilities on HCA Healthcare, and Hospital Mater 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 Hospital Mater. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare, and Hospital Mater.
Diversification Opportunities for HCA Healthcare, and Hospital Mater
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HCA and Hospital is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare, and Hospital Mater Dei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hospital Mater Dei 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 Hospital Mater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hospital Mater Dei has no effect on the direction of HCA Healthcare, i.e., HCA Healthcare, and Hospital Mater go up and down completely randomly.
Pair Corralation between HCA Healthcare, and Hospital Mater
Assuming the 90 days trading horizon HCA Healthcare, is expected to generate 0.65 times more return on investment than Hospital Mater. However, HCA Healthcare, is 1.53 times less risky than Hospital Mater. It trades about -0.13 of its potential returns per unit of risk. Hospital Mater Dei is currently generating about -0.21 per unit of risk. If you would invest 10,296 in HCA Healthcare, on October 11, 2024 and sell it today you would lose (817.00) from holding HCA Healthcare, or give up 7.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCA Healthcare, vs. Hospital Mater Dei
Performance |
| Timeline |
| HCA Healthcare, |
| Hospital Mater Dei |
HCA Healthcare, and Hospital Mater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Healthcare, and Hospital Mater
The main advantage of trading using opposite HCA Healthcare, and Hospital Mater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare, position performs unexpectedly, Hospital Mater 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 Hospital Mater will offset losses from the drop in Hospital Mater'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 |
| Hospital Mater vs. Waste Management | Hospital Mater vs. Multilaser Industrial SA | Hospital Mater vs. STAG Industrial, | Hospital Mater vs. Nordon Indstrias Metalrgicas |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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