Correlation Between Komercni Banka and HCA Healthcare

Can any of the company-specific risk be diversified away by investing in both Komercni Banka 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 Komercni Banka and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Komercni Banka and HCA Healthcare, you can compare the effects of market volatilities on Komercni Banka 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 Komercni Banka with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Komercni Banka and HCA Healthcare.

Diversification Opportunities for Komercni Banka and HCA Healthcare

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Correlation Coefficient

Komercni Banka  HCA Healthcare

Pay attention - limited upside

The 3 months correlation between Komercni and HCA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Komercni Banka and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and Komercni Banka 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 Komercni Banka 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 Komercni Banka i.e., Komercni Banka and HCA Healthcare go up and down completely randomly.

Pair Corralation between Komercni Banka and HCA Healthcare

Assuming the 90 days trading horizon Komercni Banka is expected to generate 126.0 times less return on investment than HCA Healthcare. But when comparing it to its historical volatility, Komercni Banka is 166.88 times less risky than HCA Healthcare. It trades about 0.06 of its potential returns per unit of risk. HCA Healthcare is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  25,243  in HCA Healthcare on October 3, 2024 and sell it today you would earn a total of  4,636  from holding HCA Healthcare or generate 18.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Komercni Banka  vs.  HCA Healthcare

Komercni Banka

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Komercni Banka has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Komercni Banka is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

HCA Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HCA Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Komercni Banka and HCA Healthcare

The main advantage of trading using opposite Komercni Banka and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Komercni Banka 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.

The idea behind Komercni Banka and HCA Healthcare pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.