Correlation Between HCA Healthcare and Helium One

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

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

Diversification Opportunities for HCA Healthcare and Helium One

0.31

Correlation Coefficient

HCA Healthcare  Helium One

Weak diversification

The 3 months correlation between HCA and Helium is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Helium One Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helium One Global and HCA Healthcare 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 HCA Healthcare are associated (or correlated) with Helium One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helium One Global has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Helium One go up and down completely randomly.

Pair Corralation between HCA Healthcare and Helium One

Assuming the 90 days trading horizon HCA Healthcare is expected to generate 0.68 times more return on investment than Helium One. However, HCA Healthcare is 1.47 times less risky than Helium One. It trades about 0.03 of its potential returns per unit of risk. Helium One Global is currently generating about 0.02 per unit of risk. If you would invest  25,642  in HCA Healthcare on October 24, 2024 and sell it today you would earn a total of  6,148  from holding HCA Healthcare or generate 23.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.4%
Values	Daily Returns

HCA Healthcare  vs.  Helium One Global

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.

Helium One Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helium One Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Helium One is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with HCA Healthcare and Helium One

The main advantage of trading using opposite HCA Healthcare and Helium One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare position performs unexpectedly, Helium One 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 Helium One will offset losses from the drop in Helium One's long position.

The idea behind HCA Healthcare and Helium One Global 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.