Correlation Between Natura Co and Hospital Mater
Can any of the company-specific risk be diversified away by investing in both Natura Co and Hospital Mater 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 Natura Co and Hospital Mater into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natura Co Holding and Hospital Mater Dei, you can compare the effects of market volatilities on Natura Co and Hospital Mater 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 Natura Co with a short position of Hospital Mater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natura Co and Hospital Mater.
Diversification Opportunities for Natura Co and Hospital Mater
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Natura and Hospital is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Natura Co Holding and Hospital Mater Dei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hospital Mater Dei and Natura Co 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 Natura Co Holding are associated (or correlated) with Hospital Mater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hospital Mater Dei has no effect on the direction of Natura Co i.e., Natura Co and Hospital Mater go up and down completely randomly.
Pair Corralation between Natura Co and Hospital Mater
Assuming the 90 days trading horizon Natura Co Holding is expected to generate 0.97 times more return on investment than Hospital Mater. However, Natura Co Holding is 1.03 times less risky than Hospital Mater. It trades about -0.02 of its potential returns per unit of risk. Hospital Mater Dei is currently generating about -0.11 per unit of risk. If you would invest 1,593 in Natura Co Holding on September 14, 2024 and sell it today you would lose (262.00) from holding Natura Co Holding or give up 16.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Natura Co Holding vs. Hospital Mater Dei
Performance |
| Timeline |
| Natura Co Holding |
| Hospital Mater Dei |
Natura Co and Hospital Mater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natura Co and Hospital Mater
The main advantage of trading using opposite Natura Co and Hospital Mater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natura Co position performs unexpectedly, Hospital Mater 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 Hospital Mater will offset losses from the drop in Hospital Mater's long position.| Natura Co vs. The Procter Gamble | Natura Co vs. Unilever PLC | Natura Co vs. The Este Lauder | Natura Co vs. Colgate Palmolive |
| Hospital Mater vs. Pet Center Comrcio | Hospital Mater vs. Hapvida Participaes e | Hospital Mater vs. Natura Co Holding | Hospital Mater vs. Banco BTG Pactual |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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