Correlation Between Trane Technologies and HCA Healthcare,

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

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

Diversification Opportunities for Trane Technologies and HCA Healthcare,

-0.13

Correlation Coefficient

Trane Technologies  HCA Healthcare,

Good diversification

The 3 months correlation between Trane and HCA is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Trane Technologies plc and HCA Healthcare, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCA Healthcare, and Trane Technologies 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 Trane Technologies plc 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 Trane Technologies i.e., Trane Technologies and HCA Healthcare, go up and down completely randomly.

Pair Corralation between Trane Technologies and HCA Healthcare,

Assuming the 90 days trading horizon Trane Technologies plc is expected to under-perform the HCA Healthcare,. But the stock apears to be less risky and, when comparing its historical volatility, Trane Technologies plc is 1.0 times less risky than HCA Healthcare,. The stock trades about -0.15 of its potential returns per unit of risk. The HCA Healthcare, is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  9,091  in HCA Healthcare, on December 22, 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

Trane Technologies plc  vs.  HCA Healthcare,

Trane Technologies plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trane Technologies plc 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.

HCA Healthcare,

Risk-Adjusted Performance

Insignificant

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.

Pair Trading with Trane Technologies and HCA Healthcare,

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

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.