Correlation Between Fresenius Medical and Applied Materials,
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Applied Materials, 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 Applied Materials, 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 Applied Materials,, you can compare the effects of market volatilities on Fresenius Medical and Applied Materials, 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 Applied Materials,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Applied Materials,.
Diversification Opportunities for Fresenius Medical and Applied Materials,
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fresenius and Applied is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Applied Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials, 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 Applied Materials,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Materials, has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Applied Materials, go up and down completely randomly.
Pair Corralation between Fresenius Medical and Applied Materials,
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 1.38 times more return on investment than Applied Materials,. However, Fresenius Medical is 1.38 times more volatile than Applied Materials,. It trades about 0.16 of its potential returns per unit of risk. Applied Materials, is currently generating about 0.1 per unit of risk. If you would invest 10,945 in Fresenius Medical Care on October 26, 2024 and sell it today you would earn a total of 2,744 from holding Fresenius Medical Care or generate 25.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Applied Materials,
Performance |
| Timeline |
| Fresenius Medical Care |
| Applied Materials, |
Fresenius Medical and Applied Materials, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Applied Materials,
The main advantage of trading using opposite Fresenius Medical and Applied Materials, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Applied Materials, 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 Applied Materials, will offset losses from the drop in Applied Materials,'s long position.| Fresenius Medical vs. Automatic Data Processing | Fresenius Medical vs. Marfrig Global Foods | Fresenius Medical vs. G2D Investments | Fresenius Medical vs. Zoom Video Communications |
| Applied Materials, vs. Alaska Air Group, | Applied Materials, vs. Zoom Video Communications | Applied Materials, vs. Telecomunicaes Brasileiras SA | Applied Materials, vs. Marfrig Global Foods |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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