Correlation Between Fresenius Medical and Ambea AB
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Ambea AB 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 Ambea AB 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 Ambea AB, you can compare the effects of market volatilities on Fresenius Medical and Ambea AB 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 Ambea AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Ambea AB.
Diversification Opportunities for Fresenius Medical and Ambea AB
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fresenius and Ambea is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Ambea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambea AB 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 Ambea AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambea AB has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Ambea AB go up and down completely randomly.
Pair Corralation between Fresenius Medical and Ambea AB
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 1.12 times more return on investment than Ambea AB. However, Fresenius Medical is 1.12 times more volatile than Ambea AB. It trades about 0.33 of its potential returns per unit of risk. Ambea AB is currently generating about 0.05 per unit of risk. If you would invest 4,008 in Fresenius Medical Care on September 13, 2024 and sell it today you would earn a total of 516.00 from holding Fresenius Medical Care or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Ambea AB
Performance |
| Timeline |
| Fresenius Medical Care |
| Ambea AB |
Fresenius Medical and Ambea AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Ambea AB
The main advantage of trading using opposite Fresenius Medical and Ambea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Ambea AB 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 Ambea AB will offset losses from the drop in Ambea AB's long position.| Fresenius Medical vs. JD HEALTH INTL | Fresenius Medical vs. Fresenius SE Co | Fresenius Medical vs. Sonic Healthcare Limited | Fresenius Medical vs. Option Care Health |
| Ambea AB vs. CHIBA BANK | Ambea AB vs. Carsales | Ambea AB vs. The Hanover Insurance | Ambea AB vs. Webster Financial |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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