Correlation Between Fresenius Medical and Sartorius Stedim
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Sartorius Stedim 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 Sartorius Stedim 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 Sartorius Stedim Biotech, you can compare the effects of market volatilities on Fresenius Medical and Sartorius Stedim 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 Sartorius Stedim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Sartorius Stedim.
Diversification Opportunities for Fresenius Medical and Sartorius Stedim
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fresenius and Sartorius is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Sartorius Stedim Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Stedim Biotech 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 Sartorius Stedim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Stedim Biotech has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Sartorius Stedim go up and down completely randomly.
Pair Corralation between Fresenius Medical and Sartorius Stedim
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 0.52 times more return on investment than Sartorius Stedim. However, Fresenius Medical Care is 1.92 times less risky than Sartorius Stedim. It trades about 0.18 of its potential returns per unit of risk. Sartorius Stedim Biotech is currently generating about 0.09 per unit of risk. If you would invest 3,439 in Fresenius Medical Care on November 4, 2024 and sell it today you would earn a total of 1,385 from holding Fresenius Medical Care or generate 40.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Sartorius Stedim Biotech
Performance |
| Timeline |
| Fresenius Medical Care |
| Sartorius Stedim Biotech |
Fresenius Medical and Sartorius Stedim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Sartorius Stedim
The main advantage of trading using opposite Fresenius Medical and Sartorius Stedim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Sartorius Stedim 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 Sartorius Stedim will offset losses from the drop in Sartorius Stedim's long position.| Fresenius Medical vs. Samsung Electronics Co | Fresenius Medical vs. Samsung Electronics Co | Fresenius Medical vs. Toyota Motor Corp | Fresenius Medical vs. Reliance Industries Ltd |
| Sartorius Stedim vs. CleanTech Lithium plc | Sartorius Stedim vs. Endeavour Mining Corp | Sartorius Stedim vs. bet at home AG | Sartorius Stedim vs. Ecclesiastical Insurance Office |
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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