Correlation Between Fresenius Medical and Sydbank
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Sydbank 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 Sydbank 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 Sydbank, you can compare the effects of market volatilities on Fresenius Medical and Sydbank 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 Sydbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Sydbank.
Diversification Opportunities for Fresenius Medical and Sydbank
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fresenius and Sydbank is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Sydbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank 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 Sydbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Sydbank go up and down completely randomly.
Pair Corralation between Fresenius Medical and Sydbank
Assuming the 90 days trading horizon Fresenius Medical Care is expected to under-perform the Sydbank. But the stock apears to be less risky and, when comparing its historical volatility, Fresenius Medical Care is 2.92 times less risky than Sydbank. The stock trades about -0.22 of its potential returns per unit of risk. The Sydbank is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 37,560 in Sydbank on October 12, 2024 and sell it today you would lose (550.00) from holding Sydbank or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Sydbank
Performance |
| Timeline |
| Fresenius Medical Care |
| Sydbank |
Fresenius Medical and Sydbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Sydbank
The main advantage of trading using opposite Fresenius Medical and Sydbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Sydbank 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 Sydbank will offset losses from the drop in Sydbank's long position.| Fresenius Medical vs. Gamma Communications PLC | Fresenius Medical vs. EJF Investments | Fresenius Medical vs. Compal Electronics GDR | Fresenius Medical vs. Aeorema Communications Plc |
| Sydbank vs. Fresenius Medical Care | Sydbank vs. Creo Medical Group | Sydbank vs. Medical Properties Trust | Sydbank vs. Advanced Medical Solutions |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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