Correlation Between Fresenius Medical and GlobalData PLC
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and GlobalData PLC 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 GlobalData PLC 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 GlobalData PLC, you can compare the effects of market volatilities on Fresenius Medical and GlobalData PLC 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 GlobalData PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and GlobalData PLC.
Diversification Opportunities for Fresenius Medical and GlobalData PLC
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fresenius and GlobalData is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData PLC 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 GlobalData PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalData PLC has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and GlobalData PLC go up and down completely randomly.
Pair Corralation between Fresenius Medical and GlobalData PLC
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 0.9 times more return on investment than GlobalData PLC. However, Fresenius Medical Care is 1.11 times less risky than GlobalData PLC. It trades about 0.44 of its potential returns per unit of risk. GlobalData PLC is currently generating about 0.0 per unit of risk. If you would invest 3,570 in Fresenius Medical Care on September 1, 2024 and sell it today you would earn a total of 581.00 from holding Fresenius Medical Care or generate 16.27% 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. GlobalData PLC
Performance |
| Timeline |
| Fresenius Medical Care |
| GlobalData PLC |
Fresenius Medical and GlobalData PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and GlobalData PLC
The main advantage of trading using opposite Fresenius Medical and GlobalData PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, GlobalData PLC 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 GlobalData PLC will offset losses from the drop in GlobalData PLC's long position.| Fresenius Medical vs. Uniper SE | Fresenius Medical vs. Mulberry Group PLC | Fresenius Medical vs. London Security Plc | Fresenius Medical vs. Triad Group PLC |
| GlobalData PLC vs. Jacquet Metal Service | GlobalData PLC vs. MoneysupermarketCom Group PLC | GlobalData PLC vs. Hochschild Mining plc | GlobalData PLC vs. Greenroc Mining 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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