NEW YORK (TheStreet) -- Analysts predict earnings will soar by 11% for health care companies, higher than the 7.2% increase by the Standard & Poor's 500 Index and faster than the average for the whole sector, Bloomberg reported. The forecast came after first-quarter earnings of major health care stocks surpassed analysts' expectations.

The S&P Health Care Index has risen by 4.8% for the year to date, and 23.9% over the past calendar year.

Hedging costs rose to an eight-year high despite merger announcements from the biggest health care stocks in the wake of the biotech sell-off late in March, Bloomberg reported. Implied volatility has peaked its highest in eight years, propelled by gains from M&As from Pfizer (PFE), Allergan (AGN), Forest Laboratories (FRX) and Eli Lilly (LLY).

Stocks have skyrocketed by as much as 84% since 2011 due to the $285 billion proposed mergers and acquisitions, Bloomberg reported. The article noted investors were keen on hedging because of the recent health care stocks rally and to avoid a possible downdraft from biotech, which suffered during the selloff.

The Nasdaq biotech index dipped by 20% late in March after peaking in February. Many analysts referred to the downdraft as a "bubble burst," while some analysts argue that a bubble is far from happening.

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Health Care Stocks Still Healthy Despite Higher Hedging Costs