Correlation Between Auto Trader and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Auto Trader 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 Auto Trader and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auto Trader Group and Fresenius Medical Care, you can compare the effects of market volatilities on Auto Trader 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 Auto Trader with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and Fresenius Medical.
Diversification Opportunities for Auto Trader and Fresenius Medical
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Auto and Fresenius is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group 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 Auto Trader 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 Auto Trader Group 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 Auto Trader i.e., Auto Trader and Fresenius Medical go up and down completely randomly.
Pair Corralation between Auto Trader and Fresenius Medical
Assuming the 90 days trading horizon Auto Trader is expected to generate 17.77 times less return on investment than Fresenius Medical. But when comparing it to its historical volatility, Auto Trader Group is 1.16 times less risky than Fresenius Medical. It trades about 0.02 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 4,425 in Fresenius Medical Care on November 5, 2024 and sell it today you would earn a total of 399.00 from holding Fresenius Medical Care or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auto Trader Group vs. Fresenius Medical Care
Performance |
| Timeline |
| Auto Trader Group |
| Fresenius Medical Care |
Auto Trader and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and Fresenius Medical
The main advantage of trading using opposite Auto Trader and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader 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.| Auto Trader vs. Vienna Insurance Group | Auto Trader vs. Lowland Investment Co | Auto Trader vs. Vietnam Enterprise Investments | Auto Trader vs. EJF Investments |
| Fresenius Medical vs. Samsung Electronics Co | Fresenius Medical vs. Samsung Electronics Co | Fresenius Medical vs. Toyota Motor Corp | Fresenius Medical vs. Reliance Industries Ltd |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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