Correlation Between DaVita HealthCare and Oncolytics Biotech

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

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

Diversification Opportunities for DaVita HealthCare and Oncolytics Biotech

-0.74

Correlation Coefficient

DaVita HealthCare  Oncolytics Biotech

Pay attention - limited upside

The 3 months correlation between DaVita and Oncolytics is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding DaVita HealthCare Partners and Oncolytics Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oncolytics Biotech and DaVita 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 DaVita HealthCare Partners are associated (or correlated) with Oncolytics Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oncolytics Biotech has no effect on the direction of DaVita HealthCare i.e., DaVita HealthCare and Oncolytics Biotech go up and down completely randomly.

Pair Corralation between DaVita HealthCare and Oncolytics Biotech

Considering the 90-day investment horizon DaVita HealthCare Partners is expected to generate 0.71 times more return on investment than Oncolytics Biotech. However, DaVita HealthCare Partners is 1.41 times less risky than Oncolytics Biotech. It trades about 0.1 of its potential returns per unit of risk. Oncolytics Biotech is currently generating about -0.02 per unit of risk. If you would invest  13,525  in DaVita HealthCare Partners on June 24, 2024 and sell it today you would earn a total of  2,875  from holding DaVita HealthCare Partners or generate 21.26% return on investment over 90 days.

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

DaVita HealthCare Partners  vs.  Oncolytics Biotech

DaVita HealthCare

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DaVita HealthCare Partners are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, DaVita HealthCare sustained solid returns over the last few months and may actually be approaching a breakup point.

Oncolytics Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oncolytics Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with DaVita HealthCare and Oncolytics Biotech

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

The idea behind DaVita HealthCare Partners and Oncolytics Biotech 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.