Correlation Between Fresenius Medical and Fresenius
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical 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 Fresenius Medical and Fresenius 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 SE Co, you can compare the effects of market volatilities on Fresenius Medical 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 Fresenius Medical with a short position of Fresenius. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Fresenius.
Diversification Opportunities for Fresenius Medical and Fresenius
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fresenius and Fresenius is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE 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. 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 Fresenius Medical i.e., Fresenius Medical and Fresenius go up and down completely randomly.
Pair Corralation between Fresenius Medical and Fresenius
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 1.65 times more return on investment than Fresenius. However, Fresenius Medical is 1.65 times more volatile than Fresenius SE Co. It trades about 0.27 of its potential returns per unit of risk. Fresenius SE Co is currently generating about 0.28 per unit of risk. If you would invest 4,093 in Fresenius Medical Care on September 15, 2024 and sell it today you would earn a total of 417.00 from holding Fresenius Medical Care or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Fresenius SE Co
Performance |
| Timeline |
| Fresenius Medical Care |
| Fresenius SE |
Fresenius Medical and Fresenius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Fresenius
The main advantage of trading using opposite Fresenius Medical and Fresenius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical 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.| Fresenius Medical vs. JD HEALTH INTL | Fresenius Medical vs. Fresenius SE Co | Fresenius Medical vs. Sonic Healthcare Limited | Fresenius Medical vs. Option Care Health |
| Fresenius vs. JD HEALTH INTL | Fresenius vs. Fresenius Medical Care | Fresenius vs. Sonic Healthcare Limited | Fresenius vs. Option Care Health |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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