Correlation Between Fresenius Medical and INTUITIVE SURGICAL
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and INTUITIVE SURGICAL 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 INTUITIVE SURGICAL 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 INTUITIVE SURGICAL, you can compare the effects of market volatilities on Fresenius Medical and INTUITIVE SURGICAL 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 INTUITIVE SURGICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and INTUITIVE SURGICAL.
Diversification Opportunities for Fresenius Medical and INTUITIVE SURGICAL
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fresenius and INTUITIVE is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL 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 INTUITIVE SURGICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTUITIVE SURGICAL has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and INTUITIVE SURGICAL go up and down completely randomly.
Pair Corralation between Fresenius Medical and INTUITIVE SURGICAL
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 0.88 times more return on investment than INTUITIVE SURGICAL. However, Fresenius Medical Care is 1.13 times less risky than INTUITIVE SURGICAL. It trades about 0.22 of its potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.14 per unit of risk. If you would invest 2,120 in Fresenius Medical Care on November 7, 2024 and sell it today you would earn a total of 220.00 from holding Fresenius Medical Care or generate 10.38% 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. INTUITIVE SURGICAL
Performance |
| Timeline |
| Fresenius Medical Care |
| INTUITIVE SURGICAL |
Fresenius Medical and INTUITIVE SURGICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and INTUITIVE SURGICAL
The main advantage of trading using opposite Fresenius Medical and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, INTUITIVE SURGICAL 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 INTUITIVE SURGICAL will offset losses from the drop in INTUITIVE SURGICAL's long position.| Fresenius Medical vs. CNVISION MEDIA | Fresenius Medical vs. ANTA SPORTS PRODUCT | Fresenius Medical vs. MTY Food Group | Fresenius Medical vs. PENN Entertainment |
| INTUITIVE SURGICAL vs. Insurance Australia Group | INTUITIVE SURGICAL vs. SBI Insurance Group | INTUITIVE SURGICAL vs. Moneysupermarket Group PLC | INTUITIVE SURGICAL vs. REVO INSURANCE SPA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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