Correlation Between PureTech Health and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both PureTech Health and HCA Healthcare 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 PureTech Health and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PureTech Health plc and HCA Healthcare, you can compare the effects of market volatilities on PureTech Health and HCA Healthcare 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 PureTech Health with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and HCA Healthcare.
Diversification Opportunities for PureTech Health and HCA Healthcare
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between PureTech and HCA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health plc and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and PureTech Health 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 PureTech Health plc are associated (or correlated) with HCA Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCA Healthcare has no effect on the direction of PureTech Health i.e., PureTech Health and HCA Healthcare go up and down completely randomly.
Pair Corralation between PureTech Health and HCA Healthcare
Assuming the 90 days trading horizon PureTech Health plc is expected to under-perform the HCA Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, PureTech Health plc is 3.3 times less risky than HCA Healthcare. The stock trades about -0.04 of its potential returns per unit of risk. The HCA Healthcare is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 25,339 in HCA Healthcare on October 25, 2024 and sell it today you would earn a total of 6,853 from holding HCA Healthcare or generate 27.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
PureTech Health plc vs. HCA Healthcare
Performance |
| Timeline |
| PureTech Health plc |
| HCA Healthcare |
PureTech Health and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and HCA Healthcare
The main advantage of trading using opposite PureTech Health and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health position performs unexpectedly, HCA Healthcare 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 HCA Healthcare will offset losses from the drop in HCA Healthcare's long position.| PureTech Health vs. SupplyMe Capital PLC | PureTech Health vs. SM Energy Co | PureTech Health vs. FuelCell Energy | PureTech Health vs. Grand Vision Media |
| HCA Healthcare vs. Axfood AB | HCA Healthcare vs. Naturhouse Health SA | HCA Healthcare vs. Optima Health plc | HCA Healthcare vs. Primary Health Properties |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |