Correlation Between DaVita and Chemed

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

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

Diversification Opportunities for DaVita and Chemed

0.22

Correlation Coefficient

DaVita  Chemed

Modest diversification

The 3 months correlation between DaVita and Chemed is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding DaVita Inc and Chemed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemed and DaVita 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 Inc are associated (or correlated) with Chemed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemed has no effect on the direction of DaVita i.e., DaVita and Chemed go up and down completely randomly.

Pair Corralation between DaVita and Chemed

Assuming the 90 days horizon DaVita Inc is expected to generate 0.73 times more return on investment than Chemed. However, DaVita Inc is 1.37 times less risky than Chemed. It trades about 0.03 of its potential returns per unit of risk. Chemed is currently generating about -0.2 per unit of risk. If you would invest  12,135  in DaVita Inc on April 24, 2025 and sell it today you would earn a total of  290.00  from holding DaVita Inc or generate 2.39% return on investment over 90 days.

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

DaVita Inc  vs.  Chemed

DaVita Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DaVita Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DaVita is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Chemed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chemed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with DaVita and Chemed

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

The idea behind DaVita Inc and Chemed 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.