Correlation Between Catalyst Media and HCA Healthcare
Can any of the company-specific risk be diversified away by investing in both Catalyst Media 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 Catalyst Media and HCA Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Media Group and HCA Healthcare, you can compare the effects of market volatilities on Catalyst Media 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 Catalyst Media with a short position of HCA Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and HCA Healthcare.
Diversification Opportunities for Catalyst Media and HCA Healthcare
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Catalyst and HCA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and HCA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare and Catalyst Media 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 Catalyst Media Group 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 Catalyst Media i.e., Catalyst Media and HCA Healthcare go up and down completely randomly.
Pair Corralation between Catalyst Media and HCA Healthcare
Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the HCA Healthcare. In addition to that, Catalyst Media is 1.39 times more volatile than HCA Healthcare. It trades about -0.2 of its total potential returns per unit of risk. HCA Healthcare is currently generating about 0.11 per unit of volatility. If you would invest 29,855 in HCA Healthcare on December 30, 2024 and sell it today you would earn a total of 4,394 from holding HCA Healthcare or generate 14.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Catalyst Media Group vs. HCA Healthcare
Performance |
Timeline |
Catalyst Media Group |
HCA Healthcare |
Catalyst Media and HCA Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catalyst Media and HCA Healthcare
The main advantage of trading using opposite Catalyst Media and HCA Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media 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.Catalyst Media vs. Allianz Technology Trust | Catalyst Media vs. Ashtead Technology Holdings | Catalyst Media vs. Cairn Homes PLC | Catalyst Media vs. Cognizant Technology Solutions |
HCA Healthcare vs. Cognizant Technology Solutions | HCA Healthcare vs. Software Circle plc | HCA Healthcare vs. Ashtead Technology Holdings | HCA Healthcare vs. Allianz Technology Trust |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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