Correlation Between Vietnam Enterprise and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both Vietnam Enterprise 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 Vietnam Enterprise and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Enterprise Investments and HCA Healthcare, you can compare the effects of market volatilities on Vietnam Enterprise 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 Vietnam Enterprise with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Enterprise and HCA Healthcare.
Diversification Opportunities for Vietnam Enterprise and HCA Healthcare
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vietnam and HCA is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Enterprise Investments and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and Vietnam Enterprise 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 Vietnam Enterprise Investments 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 Vietnam Enterprise i.e., Vietnam Enterprise and HCA Healthcare go up and down completely randomly.
Pair Corralation between Vietnam Enterprise and HCA Healthcare
Assuming the 90 days trading horizon Vietnam Enterprise Investments is expected to generate 0.76 times more return on investment than HCA Healthcare. However, Vietnam Enterprise Investments is 1.32 times less risky than HCA Healthcare. It trades about 0.22 of its potential returns per unit of risk. HCA Healthcare is currently generating about -0.22 per unit of risk. If you would invest 55,600 in Vietnam Enterprise Investments on October 17, 2024 and sell it today you would earn a total of 4,100 from holding Vietnam Enterprise Investments or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Vietnam Enterprise Investments vs. HCA Healthcare
Performance |
| Timeline |
| Vietnam Enterprise |
| HCA Healthcare |
Vietnam Enterprise and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Enterprise and HCA Healthcare
The main advantage of trading using opposite Vietnam Enterprise and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Enterprise 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.| Vietnam Enterprise vs. Telecom Italia SpA | Vietnam Enterprise vs. PureTech Health plc | Vietnam Enterprise vs. Verizon Communications | Vietnam Enterprise vs. Charter Communications Cl |
| HCA Healthcare vs. Vietnam Enterprise Investments | HCA Healthcare vs. Chrysalis Investments | HCA Healthcare vs. Livermore Investments Group | HCA Healthcare vs. Young Cos Brewery |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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