Correlation Between HCA Healthcare, and BIONTECH

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

By analyzing existing cross correlation between HCA Healthcare, and BIONTECH SE DRN, you can compare the effects of market volatilities on HCA Healthcare, and BIONTECH 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 BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCA Healthcare, and BIONTECH.

Diversification Opportunities for HCA Healthcare, and BIONTECH

-0.1

Correlation Coefficient

HCA Healthcare,  BIONTECH

Good diversification

The 3 months correlation between HCA and BIONTECH is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare, and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN 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 BIONTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIONTECH SE DRN has no effect on the direction of HCA Healthcare, i.e., HCA Healthcare, and BIONTECH go up and down completely randomly.

Pair Corralation between HCA Healthcare, and BIONTECH

Assuming the 90 days trading horizon HCA Healthcare, is expected to generate 0.62 times more return on investment than BIONTECH. However, HCA Healthcare, is 1.61 times less risky than BIONTECH. It trades about 0.04 of its potential returns per unit of risk. BIONTECH SE DRN is currently generating about -0.15 per unit of risk. If you would invest  9,091  in HCA Healthcare, on December 24, 2024 and sell it today you would earn a total of  255.00  from holding HCA Healthcare, or generate 2.8% return on investment over 90 days.

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

HCA Healthcare,  vs.  BIONTECH SE DRN

HCA Healthcare,

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HCA Healthcare, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, HCA Healthcare, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BIONTECH SE DRN

Risk-Adjusted Performance

Very Weak

Over the last 90 days BIONTECH SE DRN 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 basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with HCA Healthcare, and BIONTECH

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

The idea behind HCA Healthcare, and BIONTECH SE DRN 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.