Correlation Between Air Products and HCA Healthcare,

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

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

Diversification Opportunities for Air Products and HCA Healthcare,

-0.36

Correlation Coefficient

Air Products  HCA Healthcare,

Very good diversification

The 3 months correlation between Air and HCA is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and HCA Healthcare, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare, and Air Products 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 Air Products and 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 Air Products i.e., Air Products and HCA Healthcare, go up and down completely randomly.

Pair Corralation between Air Products and HCA Healthcare,

Assuming the 90 days trading horizon Air Products and is expected to generate 1.21 times more return on investment than HCA Healthcare,. However, Air Products is 1.21 times more volatile than HCA Healthcare,. It trades about 0.1 of its potential returns per unit of risk. HCA Healthcare, is currently generating about -0.12 per unit of risk. If you would invest  39,010  in Air Products and on October 8, 2024 and sell it today you would earn a total of  5,840  from holding Air Products and or generate 14.97% return on investment over 90 days.

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

Air Products and  vs.  HCA Healthcare,

Air Products

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Air Products and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Air Products sustained solid returns over the last few months and may actually be approaching a breakup point.

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. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Air Products and HCA Healthcare,

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

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.