Correlation Between HCA Holdings and Omnicell

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

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

Diversification Opportunities for HCA Holdings and Omnicell

0.25

Correlation Coefficient

HCA Holdings  Omnicell

Modest diversification

The 3 months correlation between HCA and Omnicell is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding HCA Holdings and Omnicell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicell 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 Omnicell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnicell has no effect on the direction of HCA Holdings i.e., HCA Holdings and Omnicell go up and down completely randomly.

Pair Corralation between HCA Holdings and Omnicell

Considering the 90-day investment horizon HCA Holdings is expected to generate 15.28 times less return on investment than Omnicell. But when comparing it to its historical volatility, HCA Holdings is 1.61 times less risky than Omnicell. It trades about 0.02 of its potential returns per unit of risk. Omnicell is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,463  in Omnicell on May 7, 2025 and sell it today you would earn a total of  579.00  from holding Omnicell or generate 23.51% return on investment over 90 days.

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

HCA Holdings  vs.  Omnicell

HCA Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HCA Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, HCA Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Omnicell

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Omnicell are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, Omnicell disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HCA Holdings and Omnicell

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

The idea behind HCA Holdings and Omnicell 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.