Correlation Between News Corp and HCA Healthcare

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

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

Diversification Opportunities for News Corp and HCA Healthcare

-0.82

Correlation Coefficient

News Corp  HCA Healthcare

Pay attention - limited upside

The 3 months correlation between News and HCA is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding News Corp Cl and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and News Corp 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 News Corp Cl 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 News Corp i.e., News Corp and HCA Healthcare go up and down completely randomly.

Pair Corralation between News Corp and HCA Healthcare

Assuming the 90 days trading horizon News Corp Cl is expected to generate 0.68 times more return on investment than HCA Healthcare. However, News Corp Cl is 1.48 times less risky than HCA Healthcare. It trades about 0.05 of its potential returns per unit of risk. HCA Healthcare is currently generating about -0.14 per unit of risk. If you would invest  2,802  in News Corp Cl on August 31, 2024 and sell it today you would earn a total of  104.00  from holding News Corp Cl or generate 3.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

News Corp Cl  vs.  HCA Healthcare

News Corp Cl

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in News Corp Cl are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, News Corp 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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with News Corp and HCA Healthcare

The main advantage of trading using opposite News Corp and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Corp 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 News Corp Cl 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.