Correlation Between Wizz Air and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both Wizz Air 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 Wizz Air and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and HCA Healthcare, you can compare the effects of market volatilities on Wizz Air 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 Wizz Air with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and HCA Healthcare.
Diversification Opportunities for Wizz Air and HCA Healthcare
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wizz and HCA is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and Wizz Air 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 Wizz Air Holdings 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 Wizz Air i.e., Wizz Air and HCA Healthcare go up and down completely randomly.
Pair Corralation between Wizz Air and HCA Healthcare
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the HCA Healthcare. In addition to that, Wizz Air is 3.67 times more volatile than HCA Healthcare. It trades about -0.08 of its total potential returns per unit of risk. HCA Healthcare is currently generating about -0.01 per unit of volatility. If you would invest 30,144 in HCA Healthcare on October 12, 2024 and sell it today you would lose (84.00) from holding HCA Healthcare or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. HCA Healthcare
Performance |
| Timeline |
| Wizz Air Holdings |
| HCA Healthcare |
Wizz Air and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and HCA Healthcare
The main advantage of trading using opposite Wizz Air and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air 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.| Wizz Air vs. CHINA TONTINE WINES | Wizz Air vs. Heidelberg Materials AG | Wizz Air vs. Treasury Wine Estates | Wizz Air vs. Compagnie Plastic Omnium |
| HCA Healthcare vs. Air New Zealand | HCA Healthcare vs. Ryanair Holdings plc | HCA Healthcare vs. Nexstar Media Group | HCA Healthcare vs. Wizz Air Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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