Correlation Between Fresenius Medical and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Silvercorp Metals 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 Silvercorp Metals 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 Silvercorp Metals, you can compare the effects of market volatilities on Fresenius Medical and Silvercorp Metals 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 Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Silvercorp Metals.
Diversification Opportunities for Fresenius Medical and Silvercorp Metals
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fresenius and Silvercorp is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals 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 Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Fresenius Medical and Silvercorp Metals
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 0.63 times more return on investment than Silvercorp Metals. However, Fresenius Medical Care is 1.58 times less risky than Silvercorp Metals. It trades about 0.05 of its potential returns per unit of risk. Silvercorp Metals is currently generating about 0.02 per unit of risk. If you would invest 2,866 in Fresenius Medical Care on September 3, 2024 and sell it today you would earn a total of 1,285 from holding Fresenius Medical Care or generate 44.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.35% |
| Values | Daily Returns |
Fresenius Medical Care vs. Silvercorp Metals
Performance |
| Timeline |
| Fresenius Medical Care |
| Silvercorp Metals |
Fresenius Medical and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Silvercorp Metals
The main advantage of trading using opposite Fresenius Medical and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Silvercorp Metals 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 Silvercorp Metals will offset losses from the drop in Silvercorp Metals' long position.| Fresenius Medical vs. Catalyst Media Group | Fresenius Medical vs. CATLIN GROUP | Fresenius Medical vs. Magnora ASA | Fresenius Medical vs. RTW Venture Fund |
| Silvercorp Metals vs. British American Tobacco | Silvercorp Metals vs. International Biotechnology Trust | Silvercorp Metals vs. Futura Medical | Silvercorp Metals vs. Gamma Communications 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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