Correlation Between Young Cos and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both Young Cos 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 Young Cos and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Cos Brewery and HCA Healthcare, you can compare the effects of market volatilities on Young Cos 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 Young Cos with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and HCA Healthcare.
Diversification Opportunities for Young Cos and HCA Healthcare
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Young and HCA is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and Young Cos 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 Young Cos Brewery 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 Young Cos i.e., Young Cos and HCA Healthcare go up and down completely randomly.
Pair Corralation between Young Cos and HCA Healthcare
Assuming the 90 days trading horizon Young Cos Brewery is expected to generate 1.49 times more return on investment than HCA Healthcare. However, Young Cos is 1.49 times more volatile than HCA Healthcare. It trades about -0.11 of its potential returns per unit of risk. HCA Healthcare is currently generating about -0.22 per unit of risk. If you would invest 62,258 in Young Cos Brewery on October 17, 2024 and sell it today you would lose (4,658) from holding Young Cos Brewery or give up 7.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Young Cos Brewery vs. HCA Healthcare
Performance |
| Timeline |
| Young Cos Brewery |
| HCA Healthcare |
Young Cos and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Young Cos and HCA Healthcare
The main advantage of trading using opposite Young Cos and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos 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.| Young Cos vs. Jupiter Fund Management | Young Cos vs. Litigation Capital Management | Young Cos vs. Liontrust Asset Management | Young Cos vs. Chrysalis Investments |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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