Correlation Between Symphony Environmental and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both Symphony Environmental 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 Symphony Environmental and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Symphony Environmental Technologies and HCA Healthcare, you can compare the effects of market volatilities on Symphony Environmental 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 Symphony Environmental with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symphony Environmental and HCA Healthcare.
Diversification Opportunities for Symphony Environmental and HCA Healthcare
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Symphony and HCA is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Symphony Environmental Technol and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and Symphony Environmental 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 Symphony Environmental Technologies 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 Symphony Environmental i.e., Symphony Environmental and HCA Healthcare go up and down completely randomly.
Pair Corralation between Symphony Environmental and HCA Healthcare
Assuming the 90 days trading horizon Symphony Environmental Technologies is expected to generate 3.5 times more return on investment than HCA Healthcare. However, Symphony Environmental is 3.5 times more volatile than HCA Healthcare. It trades about -0.12 of its potential returns per unit of risk. HCA Healthcare is currently generating about -0.44 per unit of risk. If you would invest 325.00 in Symphony Environmental Technologies on September 20, 2024 and sell it today you would lose (35.00) from holding Symphony Environmental Technologies or give up 10.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Symphony Environmental Technol vs. HCA Healthcare
Performance |
| Timeline |
| Symphony Environmental |
| HCA Healthcare |
Symphony Environmental and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symphony Environmental and HCA Healthcare
The main advantage of trading using opposite Symphony Environmental and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symphony Environmental 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.| Symphony Environmental vs. Atalaya Mining | Symphony Environmental vs. Central Asia Metals | Symphony Environmental vs. Metals Exploration Plc | Symphony Environmental vs. SANTANDER UK 10 |
| HCA Healthcare vs. Samsung Electronics Co | HCA Healthcare vs. Samsung Electronics Co | HCA Healthcare vs. Hyundai Motor | HCA Healthcare vs. Reliance Industries Ltd |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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