Correlation Between JD HEALTH and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both JD HEALTH 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 JD HEALTH and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD HEALTH INTL and Fresenius Medical Care, you can compare the effects of market volatilities on JD HEALTH 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 JD HEALTH with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD HEALTH and Fresenius Medical.
Diversification Opportunities for JD HEALTH and Fresenius Medical
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 8ZN and Fresenius is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding JD HEALTH INTL 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 JD HEALTH 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 JD HEALTH INTL 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 JD HEALTH i.e., JD HEALTH and Fresenius Medical go up and down completely randomly.
Pair Corralation between JD HEALTH and Fresenius Medical
Assuming the 90 days horizon JD HEALTH INTL is expected to generate 2.72 times more return on investment than Fresenius Medical. However, JD HEALTH is 2.72 times more volatile than Fresenius Medical Care. It trades about 0.13 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about -0.18 per unit of risk. If you would invest 378.00 in JD HEALTH INTL on November 28, 2024 and sell it today you would earn a total of 40.00 from holding JD HEALTH INTL or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
JD HEALTH INTL vs. Fresenius Medical Care
Performance |
| Timeline |
| JD HEALTH INTL |
| Fresenius Medical Care |
JD HEALTH and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD HEALTH and Fresenius Medical
The main advantage of trading using opposite JD HEALTH and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD HEALTH 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.| JD HEALTH vs. Nanjing Panda Electronics | JD HEALTH vs. Nucletron Electronic Aktiengesellschaft | JD HEALTH vs. Siamgas And Petrochemicals | JD HEALTH vs. Arrow Electronics |
| Fresenius Medical vs. IMPERIAL TOBACCO | Fresenius Medical vs. BRIT AMER TOBACCO | Fresenius Medical vs. Agilent Technologies | Fresenius Medical vs. GLG LIFE TECH |
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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