Correlation Between HCA Healthcare and Chemed

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

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

Diversification Opportunities for HCA Healthcare and Chemed

-0.03

Correlation Coefficient

HCA Healthcare  Chemed

Good diversification

The 3 months correlation between HCA and Chemed is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare and Chemed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemed 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 Chemed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemed has no effect on the direction of HCA Healthcare i.e., HCA Healthcare and Chemed go up and down completely randomly.

Pair Corralation between HCA Healthcare and Chemed

Assuming the 90 days trading horizon HCA Healthcare is expected to generate 0.59 times more return on investment than Chemed. However, HCA Healthcare is 1.69 times less risky than Chemed. It trades about 0.08 of its potential returns per unit of risk. Chemed is currently generating about -0.2 per unit of risk. If you would invest  29,383  in HCA Healthcare on April 24, 2025 and sell it today you would earn a total of  1,827  from holding HCA Healthcare or generate 6.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

HCA Healthcare  vs.  Chemed

HCA Healthcare

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HCA Healthcare are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical indicators, HCA Healthcare may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Chemed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chemed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with HCA Healthcare and Chemed

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

The idea behind HCA Healthcare and Chemed 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.