Correlation Between CompuGroup Medical and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Fresenius Medical 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 CompuGroup Medical and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompuGroup Medical AG and Fresenius Medical Care, you can compare the effects of market volatilities on CompuGroup Medical and Fresenius Medical 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 CompuGroup Medical with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Fresenius Medical.
Diversification Opportunities for CompuGroup Medical and Fresenius Medical
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompuGroup and Fresenius is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care and CompuGroup 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 CompuGroup Medical AG are associated (or correlated) with Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Fresenius Medical go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Fresenius Medical
Assuming the 90 days trading horizon CompuGroup Medical is expected to generate 2.21 times less return on investment than Fresenius Medical. In addition to that, CompuGroup Medical is 1.09 times more volatile than Fresenius Medical Care. It trades about 0.09 of its total potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.23 per unit of volatility. If you would invest 3,875 in Fresenius Medical Care on August 28, 2024 and sell it today you would earn a total of 403.00 from holding Fresenius Medical Care or generate 10.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Fresenius Medical Care
Performance |
| Timeline |
| CompuGroup Medical |
| Fresenius Medical Care |
CompuGroup Medical and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Fresenius Medical
The main advantage of trading using opposite CompuGroup Medical and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| CompuGroup Medical vs. Samsung Electronics Co | CompuGroup Medical vs. Samsung Electronics Co | CompuGroup Medical vs. Hyundai Motor | CompuGroup Medical vs. Toyota Motor Corp |
| Fresenius Medical vs. PPHE Hotel Group | Fresenius Medical vs. Park Hotels Resorts | Fresenius Medical vs. Electronic Arts | Fresenius Medical vs. Fidelity National Information |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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