Correlation Between Fresenius Medical and Leroy Seafood
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Leroy Seafood 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 Fresenius Medical and Leroy Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresenius Medical Care and Leroy Seafood Group, you can compare the effects of market volatilities on Fresenius Medical and Leroy Seafood 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 Fresenius Medical with a short position of Leroy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Leroy Seafood.
Diversification Opportunities for Fresenius Medical and Leroy Seafood
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fresenius and Leroy is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Leroy Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leroy Seafood Group and Fresenius Medical 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 Fresenius Medical Care are associated (or correlated) with Leroy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leroy Seafood Group has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Leroy Seafood go up and down completely randomly.
Pair Corralation between Fresenius Medical and Leroy Seafood
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 1.08 times more return on investment than Leroy Seafood. However, Fresenius Medical is 1.08 times more volatile than Leroy Seafood Group. It trades about 0.04 of its potential returns per unit of risk. Leroy Seafood Group is currently generating about 0.03 per unit of risk. If you would invest 3,516 in Fresenius Medical Care on December 1, 2024 and sell it today you would earn a total of 1,115 from holding Fresenius Medical Care or generate 31.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fresenius Medical Care vs. Leroy Seafood Group
Performance |
| Timeline |
| Fresenius Medical Care |
| Leroy Seafood Group |
Fresenius Medical and Leroy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Leroy Seafood
The main advantage of trading using opposite Fresenius Medical and Leroy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Leroy Seafood 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 Leroy Seafood will offset losses from the drop in Leroy Seafood's long position.| Fresenius Medical vs. Fulcrum Metals PLC | Fresenius Medical vs. Public Storage | Fresenius Medical vs. GlobalData PLC | Fresenius Medical vs. GreenX Metals |
| Leroy Seafood vs. Vietnam Enterprise Investments | Leroy Seafood vs. Cellnex Telecom SA | Leroy Seafood vs. BlackRock Frontiers Investment | Leroy Seafood vs. Aptitude Software Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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