Correlation Between HCA Holdings and Guardian Pharmacy

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

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

Diversification Opportunities for HCA Holdings and Guardian Pharmacy

-0.77

Correlation Coefficient

HCA Holdings  Guardian Pharmacy

Pay attention - limited upside

The 3 months correlation between HCA and Guardian is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding HCA Holdings and Guardian Pharmacy Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Pharmacy and HCA Holdings 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 Holdings are associated (or correlated) with Guardian Pharmacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Pharmacy has no effect on the direction of HCA Holdings i.e., HCA Holdings and Guardian Pharmacy go up and down completely randomly.

Pair Corralation between HCA Holdings and Guardian Pharmacy

Considering the 90-day investment horizon HCA Holdings is expected to under-perform the Guardian Pharmacy. But the etf apears to be less risky and, when comparing its historical volatility, HCA Holdings is 3.93 times less risky than Guardian Pharmacy. The etf trades about -0.38 of its potential returns per unit of risk. The Guardian Pharmacy Services, is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,012  in Guardian Pharmacy Services, on October 7, 2024 and sell it today you would lose (33.00) from holding Guardian Pharmacy Services, or give up 1.64% of portfolio value over 90 days.

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

HCA Holdings  vs.  Guardian Pharmacy Services,

HCA Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HCA Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Etf'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 ETF investors.

Guardian Pharmacy

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Pharmacy Services, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Guardian Pharmacy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HCA Holdings and Guardian Pharmacy

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

The idea behind HCA Holdings and Guardian Pharmacy Services, 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..