Correlation Between National HealthCare and Surgery Partners

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

By analyzing existing cross correlation between National HealthCare and Surgery Partners, you can compare the effects of market volatilities on National HealthCare and Surgery Partners 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 National HealthCare with a short position of Surgery Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of National HealthCare and Surgery Partners.

Diversification Opportunities for National HealthCare and Surgery Partners

0.11

Correlation Coefficient

National HealthCare  Surgery Partners

Average diversification

The 3 months correlation between National and Surgery is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding National HealthCare and Surgery Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgery Partners and National 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 National HealthCare are associated (or correlated) with Surgery Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgery Partners has no effect on the direction of National HealthCare i.e., National HealthCare and Surgery Partners go up and down completely randomly.

Pair Corralation between National HealthCare and Surgery Partners

Considering the 90-day investment horizon National HealthCare is expected to generate 0.64 times more return on investment than Surgery Partners. However, National HealthCare is 1.56 times less risky than Surgery Partners. It trades about 0.01 of its potential returns per unit of risk. Surgery Partners is currently generating about -0.01 per unit of risk. If you would invest  9,510  in National HealthCare on May 7, 2025 and sell it today you would lose (33.00) from holding National HealthCare or give up 0.35% of portfolio value over 90 days.

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

National HealthCare  vs.  Surgery Partners

National HealthCare

Risk-Adjusted Performance

Weakest

Over the last 90 days National HealthCare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, National HealthCare is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Surgery Partners

Risk-Adjusted Performance

Weakest

Over the last 90 days Surgery Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Surgery Partners is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with National HealthCare and Surgery Partners

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

The idea behind National HealthCare and Surgery Partners 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.