Correlation Between Zegona Communications and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both Zegona Communications 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 Zegona Communications and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zegona Communications Plc and HCA Healthcare, you can compare the effects of market volatilities on Zegona Communications 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 Zegona Communications with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and HCA Healthcare.
Diversification Opportunities for Zegona Communications and HCA Healthcare
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zegona and HCA is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and Zegona Communications 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 Zegona Communications 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 Zegona Communications i.e., Zegona Communications and HCA Healthcare go up and down completely randomly.
Pair Corralation between Zegona Communications and HCA Healthcare
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 4.11 times more return on investment than HCA Healthcare. However, Zegona Communications is 4.11 times more volatile than HCA Healthcare. It trades about 0.25 of its potential returns per unit of risk. HCA Healthcare is currently generating about -0.15 per unit of risk. If you would invest 32,000 in Zegona Communications Plc on October 17, 2024 and sell it today you would earn a total of 8,200 from holding Zegona Communications Plc or generate 25.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Zegona Communications Plc vs. HCA Healthcare
Performance |
| Timeline |
| Zegona Communications Plc |
| HCA Healthcare |
Zegona Communications and HCA Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and HCA Healthcare
The main advantage of trading using opposite Zegona Communications and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications 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.| Zegona Communications vs. Vitec Software Group | Zegona Communications vs. Software Circle plc | Zegona Communications vs. Sovereign Metals | Zegona Communications vs. Gaming Realms plc |
| HCA Healthcare vs. Hochschild Mining plc | HCA Healthcare vs. Zegona Communications Plc | HCA Healthcare vs. Europa Metals | HCA Healthcare vs. Coor Service Management |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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