Correlation Between Fresenius Medical and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Fresenius 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 Fresenius 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 Fresenius Medical Care and Fresenius Medical Care, you can compare the effects of market volatilities on Fresenius 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 Fresenius Medical with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Fresenius Medical.
Diversification Opportunities for Fresenius Medical and Fresenius Medical
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fresenius and Fresenius is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care 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 Fresenius 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 Fresenius Medical Care 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 Fresenius Medical i.e., Fresenius Medical and Fresenius Medical go up and down completely randomly.
Pair Corralation between Fresenius Medical and Fresenius Medical
Assuming the 90 days horizon Fresenius Medical is expected to generate 1.07 times less return on investment than Fresenius Medical. But when comparing it to its historical volatility, Fresenius Medical Care is 1.08 times less risky than Fresenius Medical. It trades about 0.04 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,573 in Fresenius Medical Care on October 12, 2024 and sell it today you would earn a total of 587.00 from holding Fresenius Medical Care or generate 37.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Fresenius Medical Care
Performance |
| Timeline |
| Fresenius Medical Care |
| Fresenius Medical Care |
Fresenius Medical and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Fresenius Medical
The main advantage of trading using opposite Fresenius Medical and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius 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.| Fresenius Medical vs. Universal Health Services | Fresenius Medical vs. Superior Plus Corp | Fresenius Medical vs. NMI Holdings | Fresenius Medical vs. SIVERS SEMICONDUCTORS AB |
| Fresenius Medical vs. AM EAGLE OUTFITTERS | Fresenius Medical vs. Hemisphere Energy Corp | Fresenius Medical vs. Ribbon Communications | Fresenius Medical vs. GMO Internet |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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