Correlation Between Fresenius Medical and Walmart
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Walmart 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 Walmart 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 Walmart, you can compare the effects of market volatilities on Fresenius Medical and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Walmart.
Diversification Opportunities for Fresenius Medical and Walmart
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fresenius and Walmart is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Walmart go up and down completely randomly.
Pair Corralation between Fresenius Medical and Walmart
Assuming the 90 days trading horizon Fresenius Medical is expected to generate 9.03 times less return on investment than Walmart. But when comparing it to its historical volatility, Fresenius Medical Care is 8.22 times less risky than Walmart. It trades about 0.05 of its potential returns per unit of risk. Walmart is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,343 in Walmart on September 3, 2024 and sell it today you would earn a total of 1,617 from holding Walmart or generate 37.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Fresenius Medical Care vs. Walmart
Performance |
| Timeline |
| Fresenius Medical Care |
| Walmart |
Fresenius Medical and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Walmart
The main advantage of trading using opposite Fresenius Medical and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| Fresenius Medical vs. Catalyst Media Group | Fresenius Medical vs. CATLIN GROUP | Fresenius Medical vs. Tamburi Investment Partners | Fresenius Medical vs. Magnora ASA |
| Walmart vs. Spirent Communications plc | Walmart vs. Wizz Air Holdings | Walmart vs. International Consolidated Airlines | Walmart vs. Mindflair 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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