Correlation Between Marfrig Global and DaVita
Can any of the company-specific risk be diversified away by investing in both Marfrig Global and DaVita 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 Marfrig Global and DaVita into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marfrig Global Foods and DaVita Inc, you can compare the effects of market volatilities on Marfrig Global and DaVita 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 Marfrig Global with a short position of DaVita. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marfrig Global and DaVita.
Diversification Opportunities for Marfrig Global and DaVita
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marfrig and DaVita is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods and DaVita Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DaVita Inc and Marfrig Global 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 Marfrig Global Foods are associated (or correlated) with DaVita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DaVita Inc has no effect on the direction of Marfrig Global i.e., Marfrig Global and DaVita go up and down completely randomly.
Pair Corralation between Marfrig Global and DaVita
Assuming the 90 days trading horizon Marfrig Global Foods is expected to generate 1.45 times more return on investment than DaVita. However, Marfrig Global is 1.45 times more volatile than DaVita Inc. It trades about 0.11 of its potential returns per unit of risk. DaVita Inc is currently generating about 0.15 per unit of risk. If you would invest 955.00 in Marfrig Global Foods on September 4, 2024 and sell it today you would earn a total of 936.00 from holding Marfrig Global Foods or generate 98.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Marfrig Global Foods vs. DaVita Inc
Performance |
| Timeline |
| Marfrig Global Foods |
| DaVita Inc |
Marfrig Global and DaVita Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marfrig Global and DaVita
The main advantage of trading using opposite Marfrig Global and DaVita positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global position performs unexpectedly, DaVita 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 DaVita will offset losses from the drop in DaVita's long position.| Marfrig Global vs. JBS SA | Marfrig Global vs. Minerva SA | Marfrig Global vs. BRF SA | Marfrig Global vs. Companhia Siderrgica Nacional |
| DaVita vs. Multilaser Industrial SA | DaVita vs. Charter Communications | DaVita vs. Metalurgica Gerdau SA | DaVita vs. Paycom Software |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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