Correlation Between Fresenius Medical and Vanguard Funds
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Vanguard Funds 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 Vanguard Funds 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 Vanguard Funds Public, you can compare the effects of market volatilities on Fresenius Medical and Vanguard Funds 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 Vanguard Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Vanguard Funds.
Diversification Opportunities for Fresenius Medical and Vanguard Funds
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fresenius and Vanguard is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Vanguard Funds Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Funds Public 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 Vanguard Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Funds Public has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Vanguard Funds go up and down completely randomly.
Pair Corralation between Fresenius Medical and Vanguard Funds
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 2.35 times more return on investment than Vanguard Funds. However, Fresenius Medical is 2.35 times more volatile than Vanguard Funds Public. It trades about 0.22 of its potential returns per unit of risk. Vanguard Funds Public is currently generating about 0.11 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Vanguard Funds Public
Performance |
| Timeline |
| Fresenius Medical Care |
| Vanguard Funds Public |
Fresenius Medical and Vanguard Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Vanguard Funds
The main advantage of trading using opposite Fresenius Medical and Vanguard Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Vanguard Funds 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 Vanguard Funds will offset losses from the drop in Vanguard Funds' long position.| Fresenius Medical vs. CNVISION MEDIA | Fresenius Medical vs. ANTA SPORTS PRODUCT | Fresenius Medical vs. MTY Food Group | Fresenius Medical vs. PENN Entertainment |
| Vanguard Funds vs. Vanguard ESG Developed | Vanguard Funds vs. Vanguard Funds Public | Vanguard Funds vs. Vanguard Funds PLC | Vanguard Funds vs. Vanguard Funds Public |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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