Correlation Between Fresenius Medical and IShares Physical
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and IShares Physical 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 IShares Physical 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 iShares Physical Platinum, you can compare the effects of market volatilities on Fresenius Medical and IShares Physical 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 IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and IShares Physical.
Diversification Opportunities for Fresenius Medical and IShares Physical
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fresenius and IShares is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and iShares Physical Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Platinum 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 IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Platinum has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and IShares Physical go up and down completely randomly.
Pair Corralation between Fresenius Medical and IShares Physical
Assuming the 90 days trading horizon Fresenius Medical is expected to generate 1.82 times less return on investment than IShares Physical. But when comparing it to its historical volatility, Fresenius Medical Care is 1.48 times less risky than IShares Physical. It trades about 0.07 of its potential returns per unit of risk. iShares Physical Platinum is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 107,875 in iShares Physical Platinum on October 25, 2024 and sell it today you would earn a total of 2,750 from holding iShares Physical Platinum or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. iShares Physical Platinum
Performance |
| Timeline |
| Fresenius Medical Care |
| iShares Physical Platinum |
Fresenius Medical and IShares Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and IShares Physical
The main advantage of trading using opposite Fresenius Medical and IShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, IShares Physical 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 IShares Physical will offset losses from the drop in IShares Physical's long position.| Fresenius Medical vs. SMA Solar Technology | Fresenius Medical vs. Spotify Technology SA | Fresenius Medical vs. Seraphim Space Investment | Fresenius Medical vs. JB Hunt Transport |
| IShares Physical vs. Ion Beam Applications | IShares Physical vs. Bankers Investment Trust | IShares Physical vs. Beeks Trading | IShares Physical vs. New Residential Investment |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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