Correlation Between Fresenius Medical and Charter Communications
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Charter Communications 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 Charter Communications 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 Charter Communications Cl, you can compare the effects of market volatilities on Fresenius Medical and Charter Communications 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Charter Communications.
Diversification Opportunities for Fresenius Medical and Charter Communications
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fresenius and Charter is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Charter Communications Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Charter Communications go up and down completely randomly.
Pair Corralation between Fresenius Medical and Charter Communications
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 0.9 times more return on investment than Charter Communications. However, Fresenius Medical Care is 1.12 times less risky than Charter Communications. It trades about 0.04 of its potential returns per unit of risk. Charter Communications Cl is currently generating about 0.0 per unit of risk. If you would invest 3,079 in Fresenius Medical Care on October 16, 2024 and sell it today you would earn a total of 1,243 from holding Fresenius Medical Care or generate 40.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.01% |
| Values | Daily Returns |
Fresenius Medical Care vs. Charter Communications Cl
Performance |
| Timeline |
| Fresenius Medical Care |
| Charter Communications |
Fresenius Medical and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Charter Communications
The main advantage of trading using opposite Fresenius Medical and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| Fresenius Medical vs. Sealed Air Corp | Fresenius Medical vs. Ryanair Holdings plc | Fresenius Medical vs. Europa Metals | Fresenius Medical vs. Scandic Hotels 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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