Correlation Between Leroy Seafood and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Leroy Seafood and Fresenius Medical 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 Leroy Seafood and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leroy Seafood Group and Fresenius Medical Care, you can compare the effects of market volatilities on Leroy Seafood and Fresenius Medical 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 Leroy Seafood with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leroy Seafood and Fresenius Medical.
Diversification Opportunities for Leroy Seafood and Fresenius Medical
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Leroy and Fresenius is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Leroy Seafood Group and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care and Leroy Seafood 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 Leroy Seafood Group are associated (or correlated) with Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of Leroy Seafood i.e., Leroy Seafood and Fresenius Medical go up and down completely randomly.
Pair Corralation between Leroy Seafood and Fresenius Medical
Assuming the 90 days trading horizon Leroy Seafood is expected to generate 1.31 times less return on investment than Fresenius Medical. But when comparing it to its historical volatility, Leroy Seafood Group is 1.16 times less risky than Fresenius Medical. It trades about 0.07 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,389 in Fresenius Medical Care on September 3, 2024 and sell it today you would earn a total of 762.00 from holding Fresenius Medical Care or generate 22.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leroy Seafood Group vs. Fresenius Medical Care
Performance |
| Timeline |
| Leroy Seafood Group |
| Fresenius Medical Care |
Leroy Seafood and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leroy Seafood and Fresenius Medical
The main advantage of trading using opposite Leroy Seafood and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leroy Seafood position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| Leroy Seafood vs. GlobalData PLC | Leroy Seafood vs. Evolution Gaming Group | Leroy Seafood vs. New Residential Investment | Leroy Seafood vs. FC Investment Trust |
| Fresenius Medical vs. Catalyst Media Group | Fresenius Medical vs. CATLIN GROUP | Fresenius Medical vs. Magnora ASA | Fresenius Medical vs. RTW Venture Fund |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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