Correlation Between Fresenius Medical and Gladstone Commercial
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Gladstone Commercial 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 Gladstone Commercial 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 Gladstone Commercial Corp, you can compare the effects of market volatilities on Fresenius Medical and Gladstone Commercial 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 Gladstone Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Gladstone Commercial.
Diversification Opportunities for Fresenius Medical and Gladstone Commercial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fresenius and Gladstone is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Gladstone Commercial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial Corp 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 Gladstone Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Commercial Corp has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Gladstone Commercial go up and down completely randomly.
Pair Corralation between Fresenius Medical and Gladstone Commercial
Assuming the 90 days trading horizon Fresenius Medical is expected to generate 1.33 times less return on investment than Gladstone Commercial. In addition to that, Fresenius Medical is 1.33 times more volatile than Gladstone Commercial Corp. It trades about 0.06 of its total potential returns per unit of risk. Gladstone Commercial Corp is currently generating about 0.1 per unit of volatility. If you would invest 1,234 in Gladstone Commercial Corp on September 14, 2024 and sell it today you would earn a total of 461.00 from holding Gladstone Commercial Corp or generate 37.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.6% |
| Values | Daily Returns |
Fresenius Medical Care vs. Gladstone Commercial Corp
Performance |
| Timeline |
| Fresenius Medical Care |
| Gladstone Commercial Corp |
Fresenius Medical and Gladstone Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Gladstone Commercial
The main advantage of trading using opposite Fresenius Medical and Gladstone Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Gladstone Commercial 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 Gladstone Commercial will offset losses from the drop in Gladstone Commercial's long position.| Fresenius Medical vs. Monster Beverage Corp | Fresenius Medical vs. MoneysupermarketCom Group PLC | Fresenius Medical vs. Albion Technology General | Fresenius Medical vs. Ocean Harvest Technology |
| Gladstone Commercial vs. Fresenius Medical Care | Gladstone Commercial vs. Park Hotels Resorts | Gladstone Commercial vs. Spirent Communications plc | Gladstone Commercial vs. Melia Hotels |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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