Correlation Between Hospital Mater and Universal Health

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

By analyzing existing cross correlation between Hospital Mater Dei and Universal Health Services,, you can compare the effects of market volatilities on Hospital Mater and Universal Health 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 Hospital Mater with a short position of Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hospital Mater and Universal Health.

Diversification Opportunities for Hospital Mater and Universal Health

0.14

Correlation Coefficient

Hospital Mater  Universal Health

Average diversification

The 3 months correlation between Hospital and Universal is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hospital Mater Dei and Universal Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Ser and Hospital Mater 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 Hospital Mater Dei are associated (or correlated) with Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Ser has no effect on the direction of Hospital Mater i.e., Hospital Mater and Universal Health go up and down completely randomly.

Pair Corralation between Hospital Mater and Universal Health

Assuming the 90 days trading horizon Hospital Mater Dei is expected to under-perform the Universal Health. In addition to that, Hospital Mater is 1.03 times more volatile than Universal Health Services,. It trades about -0.16 of its total potential returns per unit of risk. Universal Health Services, is currently generating about 0.0 per unit of volatility. If you would invest  29,936  in Universal Health Services, on October 6, 2024 and sell it today you would lose (543.00) from holding Universal Health Services, or give up 1.81% of portfolio value over 90 days.

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

Hospital Mater Dei  vs.  Universal Health Services,

Hospital Mater Dei

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hospital Mater Dei has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Universal Health Ser

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Universal Health Services, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, Universal Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hospital Mater and Universal Health

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

The idea behind Hospital Mater Dei and Universal Health 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.