Correlation Between Fresenius Medical and ON Semiconductor
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and ON Semiconductor 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 ON Semiconductor 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 ON Semiconductor, you can compare the effects of market volatilities on Fresenius Medical and ON Semiconductor 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 ON Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and ON Semiconductor.
Diversification Opportunities for Fresenius Medical and ON Semiconductor
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fresenius and O2NS34 is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and ON Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON Semiconductor 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 ON Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ON Semiconductor has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and ON Semiconductor go up and down completely randomly.
Pair Corralation between Fresenius Medical and ON Semiconductor
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 1.36 times more return on investment than ON Semiconductor. However, Fresenius Medical is 1.36 times more volatile than ON Semiconductor. It trades about 0.16 of its potential returns per unit of risk. ON Semiconductor is currently generating about -0.2 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 Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. ON Semiconductor
Performance |
| Timeline |
| Fresenius Medical Care |
| ON Semiconductor |
Fresenius Medical and ON Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and ON Semiconductor
The main advantage of trading using opposite Fresenius Medical and ON Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, ON Semiconductor 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 ON Semiconductor will offset losses from the drop in ON Semiconductor'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 |
| ON Semiconductor vs. Clover Health Investments, | ON Semiconductor vs. Paycom Software | ON Semiconductor vs. Ryanair Holdings plc | ON Semiconductor vs. Air Products and |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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