Correlation Between HCA Holdings and Fresenius
Can any of the company-specific risk be diversified away by investing in both HCA Holdings and Fresenius 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 Holdings and Fresenius into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Holdings and Fresenius SE Co, you can compare the effects of market volatilities on HCA Holdings and Fresenius 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 Holdings with a short position of Fresenius. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Holdings and Fresenius.
Diversification Opportunities for HCA Holdings and Fresenius
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HCA and Fresenius is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding HCA Holdings and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE and HCA Holdings 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 Holdings are associated (or correlated) with Fresenius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius SE has no effect on the direction of HCA Holdings i.e., HCA Holdings and Fresenius go up and down completely randomly.
Pair Corralation between HCA Holdings and Fresenius
Considering the 90-day investment horizon HCA Holdings is expected to under-perform the Fresenius. In addition to that, HCA Holdings is 1.13 times more volatile than Fresenius SE Co. It trades about -0.27 of its total potential returns per unit of risk. Fresenius SE Co is currently generating about -0.25 per unit of volatility. If you would invest 937.00 in Fresenius SE Co on August 28, 2024 and sell it today you would lose (66.00) from holding Fresenius SE Co or give up 7.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
HCA Holdings vs. Fresenius SE Co
Performance |
| Timeline |
| HCA Holdings |
| Fresenius SE |
HCA Holdings and Fresenius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Holdings and Fresenius
The main advantage of trading using opposite HCA Holdings and Fresenius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Holdings position performs unexpectedly, Fresenius 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 Fresenius will offset losses from the drop in Fresenius' long position.| HCA Holdings vs. Elevance Health | HCA Holdings vs. Centene Corp | HCA Holdings vs. UnitedHealth Group Incorporated | HCA Holdings vs. CVS Health Corp |
| Fresenius vs. Jack Nathan Medical | Fresenius vs. Medical Facilities | Fresenius vs. Ramsay Health Care | Fresenius vs. Nova Leap 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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