Correlation Between Fresenius Medical and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks Plc, you can compare the effects of market volatilities on Fresenius Medical and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Fevertree Drinks.
Diversification Opportunities for Fresenius Medical and Fevertree Drinks
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fresenius and Fevertree is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Fevertree Drinks go up and down completely randomly.
Pair Corralation between Fresenius Medical and Fevertree Drinks
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 0.87 times more return on investment than Fevertree Drinks. However, Fresenius Medical Care is 1.15 times less risky than Fevertree Drinks. It trades about 0.11 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about -0.12 per unit of risk. If you would invest 3,759 in Fresenius Medical Care on October 26, 2024 and sell it today you would earn a total of 898.00 from holding Fresenius Medical Care or generate 23.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Fevertree Drinks Plc
Performance |
| Timeline |
| Fresenius Medical Care |
| Fevertree Drinks Plc |
Fresenius Medical and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Fevertree Drinks
The main advantage of trading using opposite Fresenius Medical and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| Fresenius Medical vs. Auto Trader Group | Fresenius Medical vs. Qurate Retail Series | Fresenius Medical vs. Verizon Communications | Fresenius Medical vs. Gamma Communications PLC |
| Fevertree Drinks vs. Scandic Hotels Group | Fevertree Drinks vs. International Consolidated Airlines | Fevertree Drinks vs. Creo Medical Group | Fevertree Drinks vs. Fresenius Medical Care |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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