Correlation Between American Healthcare and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both American Healthcare and Marfrig Global 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 American Healthcare and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Healthcare REIT, and Marfrig Global Foods, you can compare the effects of market volatilities on American Healthcare and Marfrig Global 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 American Healthcare with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Healthcare and Marfrig Global.
Diversification Opportunities for American Healthcare and Marfrig Global
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Marfrig is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding American Healthcare REIT, and Marfrig Global Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfrig Global Foods and American 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 American Healthcare REIT, are associated (or correlated) with Marfrig Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfrig Global Foods has no effect on the direction of American Healthcare i.e., American Healthcare and Marfrig Global go up and down completely randomly.
Pair Corralation between American Healthcare and Marfrig Global
Considering the 90-day investment horizon American Healthcare REIT, is expected to generate 0.6 times more return on investment than Marfrig Global. However, American Healthcare REIT, is 1.68 times less risky than Marfrig Global. It trades about 0.32 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.16 per unit of risk. If you would invest 2,088 in American Healthcare REIT, on August 31, 2024 and sell it today you would earn a total of 869.00 from holding American Healthcare REIT, or generate 41.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Healthcare REIT, vs. Marfrig Global Foods
Performance |
| Timeline |
| American Healthcare REIT, |
| Marfrig Global Foods |
American Healthcare and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Healthcare and Marfrig Global
The main advantage of trading using opposite American Healthcare and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Healthcare position performs unexpectedly, Marfrig Global 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 Marfrig Global will offset losses from the drop in Marfrig Global's long position.| American Healthcare vs. Seadrill Limited | American Healthcare vs. Helmerich and Payne | American Healthcare vs. Western Acquisition Ventures | American Healthcare vs. Cedar Realty Trust |
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Check out your portfolio center.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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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