Correlation Between HCA Healthcare, and Zoom Video

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

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

Diversification Opportunities for HCA Healthcare, and Zoom Video

-0.86

Correlation Coefficient

HCA Healthcare,  Zoom Video

Pay attention - limited upside

The 3 months correlation between HCA and Zoom is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare, and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of HCA Healthcare, i.e., HCA Healthcare, and Zoom Video go up and down completely randomly.

Pair Corralation between HCA Healthcare, and Zoom Video

Assuming the 90 days trading horizon HCA Healthcare, is expected to under-perform the Zoom Video. But the stock apears to be less risky and, when comparing its historical volatility, HCA Healthcare, is 1.2 times less risky than Zoom Video. The stock trades about -0.1 of its potential returns per unit of risk. The Zoom Video Communications is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,504  in Zoom Video Communications on October 9, 2024 and sell it today you would earn a total of  448.00  from holding Zoom Video Communications or generate 29.79% return on investment over 90 days.

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

HCA Healthcare,  vs.  Zoom Video Communications

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 uncertain 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.

Zoom Video Communications

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zoom Video sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HCA Healthcare, and Zoom Video

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

The idea behind HCA Healthcare, and Zoom Video Communications 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.