Correlation Between Fresenius Medical and Jadestone Energy
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Jadestone Energy 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 Jadestone Energy 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 Jadestone Energy, you can compare the effects of market volatilities on Fresenius Medical and Jadestone Energy 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 Jadestone Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Jadestone Energy.
Diversification Opportunities for Fresenius Medical and Jadestone Energy
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fresenius and Jadestone is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Jadestone Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jadestone Energy 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 Jadestone Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jadestone Energy has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Jadestone Energy go up and down completely randomly.
Pair Corralation between Fresenius Medical and Jadestone Energy
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 0.87 times more return on investment than Jadestone Energy. However, Fresenius Medical Care is 1.14 times less risky than Jadestone Energy. It trades about 0.44 of its potential returns per unit of risk. Jadestone Energy is currently generating about -0.06 per unit of risk. If you would invest 3,679 in Fresenius Medical Care on September 4, 2024 and sell it today you would earn a total of 629.00 from holding Fresenius Medical Care or generate 17.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fresenius Medical Care vs. Jadestone Energy
Performance |
| Timeline |
| Fresenius Medical Care |
| Jadestone Energy |
Fresenius Medical and Jadestone Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Jadestone Energy
The main advantage of trading using opposite Fresenius Medical and Jadestone Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Jadestone Energy 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 Jadestone Energy will offset losses from the drop in Jadestone Energy'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 |
| Jadestone Energy vs. Bankers Investment Trust | Jadestone Energy vs. Fresenius Medical Care | Jadestone Energy vs. Creo Medical Group | Jadestone Energy vs. Livermore Investments 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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