Correlation Between Creo Medical and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Creo 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 Creo 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 Creo Medical Group and Fresenius Medical Care, you can compare the effects of market volatilities on Creo 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 Creo Medical with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and Fresenius Medical.
Diversification Opportunities for Creo Medical and Fresenius Medical
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Creo and Fresenius is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical 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 Creo 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 Creo Medical 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 Creo Medical i.e., Creo Medical and Fresenius Medical go up and down completely randomly.
Pair Corralation between Creo Medical and Fresenius Medical
Assuming the 90 days trading horizon Creo Medical Group is expected to under-perform the Fresenius Medical. In addition to that, Creo Medical is 1.54 times more volatile than Fresenius Medical Care. It trades about -0.23 of its total potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.03 per unit of volatility. If you would invest 3,936 in Fresenius Medical Care on August 30, 2024 and sell it today you would earn a total of 213.00 from holding Fresenius Medical Care or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creo Medical Group vs. Fresenius Medical Care
Performance |
| Timeline |
| Creo Medical Group |
| Fresenius Medical Care |
Creo Medical and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creo Medical and Fresenius Medical
The main advantage of trading using opposite Creo Medical and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo 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.| Creo Medical vs. Verizon Communications | Creo Medical vs. Naturhouse Health SA | Creo Medical vs. Aeorema Communications Plc | Creo Medical vs. Zegona Communications Plc |
| Fresenius Medical vs. Tungsten West PLC | Fresenius Medical vs. Argo Group Limited | Fresenius Medical vs. Hardide PLC | Fresenius Medical vs. Versarien 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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