Correlation Between Laboratory and HCA Holdings
Can any of the company-specific risk be diversified away by investing in both Laboratory and HCA Holdings 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 Laboratory and HCA Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laboratory of and HCA Holdings, you can compare the effects of market volatilities on Laboratory and HCA Holdings 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 Laboratory with a short position of HCA Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laboratory and HCA Holdings.
Diversification Opportunities for Laboratory and HCA Holdings
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Laboratory and HCA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of and HCA Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Holdings and Laboratory 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 Laboratory of are associated (or correlated) with HCA Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCA Holdings has no effect on the direction of Laboratory i.e., Laboratory and HCA Holdings go up and down completely randomly.
Pair Corralation between Laboratory and HCA Holdings
Allowing for the 90-day total investment horizon Laboratory is expected to generate 9.39 times less return on investment than HCA Holdings. But when comparing it to its historical volatility, Laboratory of is 1.23 times less risky than HCA Holdings. It trades about 0.01 of its potential returns per unit of risk. HCA Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 16,981 in HCA Holdings on January 25, 2024 and sell it today you would earn a total of 14,921 from holding HCA Holdings or generate 87.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laboratory of vs. HCA Holdings
Performance |
| Timeline |
| Laboratory |
| HCA Holdings |
Laboratory and HCA Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laboratory and HCA Holdings
The main advantage of trading using opposite Laboratory and HCA Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laboratory position performs unexpectedly, HCA Holdings 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 Holdings will offset losses from the drop in HCA Holdings' long position.| Laboratory vs. Aclaris Therapeutics | Laboratory vs. Prenetics Global | Laboratory vs. DarioHealth Corp | Laboratory vs. Olink Holding AB |
| HCA Holdings vs. Acadia Healthcare | HCA Holdings vs. Tenet Healthcare | HCA Holdings vs. US Physicalrapy | HCA Holdings vs. DaVita HealthCare Partners |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |