Correlation Between Fresenius Medical and Hansa Investment
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Hansa Investment 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 Hansa Investment 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 Hansa Investment, you can compare the effects of market volatilities on Fresenius Medical and Hansa Investment 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 Hansa Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Hansa Investment.
Diversification Opportunities for Fresenius Medical and Hansa Investment
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fresenius and Hansa is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Hansa Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Investment 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 Hansa Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Investment has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Hansa Investment go up and down completely randomly.
Pair Corralation between Fresenius Medical and Hansa Investment
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 1.31 times more return on investment than Hansa Investment. However, Fresenius Medical is 1.31 times more volatile than Hansa Investment. It trades about 0.05 of its potential returns per unit of risk. Hansa Investment is currently generating about 0.04 per unit of risk. If you would invest 2,893 in Fresenius Medical Care on September 4, 2024 and sell it today you would earn a total of 1,415 from holding Fresenius Medical Care or generate 48.91% 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. Hansa Investment
Performance |
| Timeline |
| Fresenius Medical Care |
| Hansa Investment |
Fresenius Medical and Hansa Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Hansa Investment
The main advantage of trading using opposite Fresenius Medical and Hansa Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Hansa Investment 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 Hansa Investment will offset losses from the drop in Hansa Investment's long position.| Fresenius Medical vs. Samsung Electronics Co | Fresenius Medical vs. Samsung Electronics Co | Fresenius Medical vs. Hyundai Motor | Fresenius Medical vs. Toyota Motor Corp |
| Hansa Investment vs. CATCo Reinsurance Opportunities | Hansa Investment vs. Fair Oaks Income | Hansa Investment vs. Legal General Group | Hansa Investment vs. Intermediate Capital 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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