Correlation Between Fresenius Medical and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and CompuGroup 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 Fresenius Medical and CompuGroup Medical 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 CompuGroup Medical AG, you can compare the effects of market volatilities on Fresenius Medical and CompuGroup 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 Fresenius Medical with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and CompuGroup Medical.
Diversification Opportunities for Fresenius Medical and CompuGroup Medical
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fresenius and CompuGroup is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and CompuGroup Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical 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 CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Fresenius Medical and CompuGroup Medical
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 0.99 times more return on investment than CompuGroup Medical. However, Fresenius Medical Care is 1.01 times less risky than CompuGroup Medical. It trades about 0.14 of its potential returns per unit of risk. CompuGroup Medical AG is currently generating about 0.07 per unit of risk. If you would invest 3,897 in Fresenius Medical Care on August 24, 2024 and sell it today you would earn a total of 256.00 from holding Fresenius Medical Care or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. CompuGroup Medical AG
Performance |
| Timeline |
| Fresenius Medical Care |
| CompuGroup Medical |
Fresenius Medical and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and CompuGroup Medical
The main advantage of trading using opposite Fresenius Medical and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, CompuGroup 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| Fresenius Medical vs. Quadrise Plc | Fresenius Medical vs. Intuitive Investments Group | Fresenius Medical vs. European Metals Holdings | Fresenius Medical vs. Athelney Trust plc |
| CompuGroup Medical vs. Quadrise Plc | CompuGroup Medical vs. Intuitive Investments Group | CompuGroup Medical vs. European Metals Holdings | CompuGroup Medical vs. Athelney Trust plc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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