Correlation Between Fresenius Medical and Cross Country
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Cross Country 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 Cross Country 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 Cross Country Healthcare, you can compare the effects of market volatilities on Fresenius Medical and Cross Country 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 Cross Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Cross Country.
Diversification Opportunities for Fresenius Medical and Cross Country
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fresenius and Cross is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Cross Country Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cross Country Healthcare 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 Cross Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cross Country Healthcare has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Cross Country go up and down completely randomly.
Pair Corralation between Fresenius Medical and Cross Country
Considering the 90-day investment horizon Fresenius Medical Care is expected to generate 0.71 times more return on investment than Cross Country. However, Fresenius Medical Care is 1.41 times less risky than Cross Country. It trades about 0.05 of its potential returns per unit of risk. Cross Country Healthcare is currently generating about -0.05 per unit of risk. If you would invest 1,532 in Fresenius Medical Care on September 4, 2024 and sell it today you would earn a total of 746.00 from holding Fresenius Medical Care or generate 48.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Cross Country Healthcare
Performance |
| Timeline |
| Fresenius Medical Care |
| Cross Country Healthcare |
Fresenius Medical and Cross Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Cross Country
The main advantage of trading using opposite Fresenius Medical and Cross Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Cross Country 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 Cross Country will offset losses from the drop in Cross Country's long position.| Fresenius Medical vs. Universal Health Services | Fresenius Medical vs. Addus HomeCare | Fresenius Medical vs. HCA Holdings | Fresenius Medical vs. Tenet Healthcare |
| Cross Country vs. ASGN Inc | Cross Country vs. Kforce Inc | Cross Country vs. Kelly Services A | Cross Country vs. AMN Healthcare Services |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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