Correlation Between HCA Holdings and Surgery Partners
Can any of the company-specific risk be diversified away by investing in both HCA Holdings and Surgery Partners 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 Surgery Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCA Holdings and Surgery Partners, you can compare the effects of market volatilities on HCA Holdings and Surgery Partners 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 Surgery Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Holdings and Surgery Partners.
Diversification Opportunities for HCA Holdings and Surgery Partners
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HCA and Surgery is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding HCA Holdings and Surgery Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgery Partners 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 Surgery Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgery Partners has no effect on the direction of HCA Holdings i.e., HCA Holdings and Surgery Partners go up and down completely randomly.
Pair Corralation between HCA Holdings and Surgery Partners
Considering the 90-day investment horizon HCA Holdings is expected to generate 0.56 times more return on investment than Surgery Partners. However, HCA Holdings is 1.79 times less risky than Surgery Partners. It trades about -0.38 of its potential returns per unit of risk. Surgery Partners is currently generating about -0.29 per unit of risk. If you would invest 41,003 in HCA Holdings on August 24, 2024 and sell it today you would lose (7,779) from holding HCA Holdings or give up 18.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCA Holdings vs. Surgery Partners
Performance |
| Timeline |
| HCA Holdings |
| Surgery Partners |
HCA Holdings and Surgery Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCA Holdings and Surgery Partners
The main advantage of trading using opposite HCA Holdings and Surgery Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Holdings position performs unexpectedly, Surgery Partners 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 Surgery Partners will offset losses from the drop in Surgery Partners' long position.| HCA Holdings vs. Acadia Healthcare | HCA Holdings vs. Tenet Healthcare | HCA Holdings vs. US Physicalrapy | HCA Holdings vs. DaVita HealthCare Partners |
| Surgery Partners vs. Pennant Group | Surgery Partners vs. The Ensign Group | Surgery Partners vs. Encompass Health Corp | Surgery Partners vs. Healthcare Services Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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