Correlation Between Fresenius Medical and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Dairy Farm 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 Dairy Farm 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 Dairy Farm International, you can compare the effects of market volatilities on Fresenius Medical and Dairy Farm 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 Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Dairy Farm.
Diversification Opportunities for Fresenius Medical and Dairy Farm
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fresenius and Dairy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International 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 Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Dairy Farm go up and down completely randomly.
Pair Corralation between Fresenius Medical and Dairy Farm
If you would invest 4,390 in Fresenius Medical Care on October 20, 2024 and sell it today you would earn a total of 93.00 from holding Fresenius Medical Care or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Dairy Farm International
Performance |
| Timeline |
| Fresenius Medical Care |
| Dairy Farm International |
Fresenius Medical and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Dairy Farm
The main advantage of trading using opposite Fresenius Medical and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| Fresenius Medical vs. Cornish Metals | Fresenius Medical vs. Southwest Airlines Co | Fresenius Medical vs. Synthomer plc | Fresenius Medical vs. DFS Furniture PLC |
| Dairy Farm vs. Blackrock World Mining | Dairy Farm vs. Metals Exploration Plc | Dairy Farm vs. Wizz Air Holdings | Dairy Farm vs. Alaska Air Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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