Correlation Between Compal Electronics and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Compal Electronics 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 Compal Electronics and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compal Electronics GDR and Fresenius Medical Care, you can compare the effects of market volatilities on Compal Electronics 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 Compal Electronics with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Fresenius Medical.
Diversification Opportunities for Compal Electronics and Fresenius Medical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and Fresenius is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR 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 Compal Electronics 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 Compal Electronics GDR 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 Compal Electronics i.e., Compal Electronics and Fresenius Medical go up and down completely randomly.
Pair Corralation between Compal Electronics and Fresenius Medical
If you would invest 310.00 in Compal Electronics GDR on October 12, 2024 and sell it today you would earn a total of 0.00 from holding Compal Electronics GDR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compal Electronics GDR vs. Fresenius Medical Care
Performance |
| Timeline |
| Compal Electronics GDR |
| Fresenius Medical Care |
Compal Electronics and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and Fresenius Medical
The main advantage of trading using opposite Compal Electronics and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics 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.| Compal Electronics vs. Datagroup SE | Compal Electronics vs. Spirent Communications plc | Compal Electronics vs. Universal Music Group | Compal Electronics vs. Capital Drilling |
| Fresenius Medical vs. Gamma Communications PLC | Fresenius Medical vs. EJF Investments | Fresenius Medical vs. Compal Electronics GDR | Fresenius Medical vs. Aeorema Communications Plc |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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