Correlation Between China Communications and Fresenius
Can any of the company-specific risk be diversified away by investing in both China Communications and Fresenius 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 China Communications and Fresenius into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Communications Services and Fresenius SE Co, you can compare the effects of market volatilities on China Communications and Fresenius 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 China Communications with a short position of Fresenius. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Communications and Fresenius.
Diversification Opportunities for China Communications and Fresenius
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Fresenius is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding China Communications Services and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE and China Communications 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 China Communications Services are associated (or correlated) with Fresenius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius SE has no effect on the direction of China Communications i.e., China Communications and Fresenius go up and down completely randomly.
Pair Corralation between China Communications and Fresenius
Assuming the 90 days horizon China Communications Services is expected to generate 1.34 times more return on investment than Fresenius. However, China Communications is 1.34 times more volatile than Fresenius SE Co. It trades about 0.28 of its potential returns per unit of risk. Fresenius SE Co is currently generating about 0.2 per unit of risk. If you would invest 47.00 in China Communications Services on September 13, 2024 and sell it today you would earn a total of 4.00 from holding China Communications Services or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Communications Services vs. Fresenius SE Co
Performance |
| Timeline |
| China Communications |
| Fresenius SE |
China Communications and Fresenius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Communications and Fresenius
The main advantage of trading using opposite China Communications and Fresenius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Communications position performs unexpectedly, Fresenius 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 will offset losses from the drop in Fresenius' long position.| China Communications vs. Superior Plus Corp | China Communications vs. SIVERS SEMICONDUCTORS AB | China Communications vs. Norsk Hydro ASA | China Communications vs. Reliance Steel Aluminum |
| Fresenius vs. Tencent Music Entertainment | Fresenius vs. PROSIEBENSAT1 MEDIADR4 | Fresenius vs. China Communications Services | Fresenius vs. Entravision Communications |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |