Correlation Between Mednax and HCA Holdings
Can any of the company-specific risk be diversified away by investing in both Mednax 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 Mednax and HCA Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mednax Inc and HCA Holdings, you can compare the effects of market volatilities on Mednax 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 Mednax with a short position of HCA Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mednax and HCA Holdings.
Diversification Opportunities for Mednax and HCA Holdings
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mednax and HCA is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mednax Inc and HCA Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Holdings and Mednax 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 Mednax Inc 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 Mednax i.e., Mednax and HCA Holdings go up and down completely randomly.
Pair Corralation between Mednax and HCA Holdings
Allowing for the 90-day total investment horizon Mednax Inc is expected to generate 1.67 times more return on investment than HCA Holdings. However, Mednax is 1.67 times more volatile than HCA Holdings. It trades about 0.06 of its potential returns per unit of risk. HCA Holdings is currently generating about -0.07 per unit of risk. If you would invest 846.00 in Mednax Inc on January 20, 2024 and sell it today you would earn a total of 35.00 from holding Mednax Inc or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mednax Inc vs. HCA Holdings
Performance |
| Timeline |
| Mednax Inc |
| HCA Holdings |
Mednax and HCA Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mednax and HCA Holdings
The main advantage of trading using opposite Mednax and HCA Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mednax 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.| Mednax vs. Certara | Mednax vs. HealthStream | Mednax vs. Evolent Health | Mednax vs. Streamline Health Solutions |
| HCA Holdings vs. Elevance Health | HCA Holdings vs. Centene Corp | HCA Holdings vs. UnitedHealth Group Incorporated | HCA Holdings vs. CVS Health Corp |
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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