Correlation Between Fresenius Medical and Zoom Video
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Zoom Video 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 Zoom Video 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 Zoom Video Communications, you can compare the effects of market volatilities on Fresenius Medical and Zoom Video 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 Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Zoom Video.
Diversification Opportunities for Fresenius Medical and Zoom Video
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fresenius and Zoom is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Zoom Video go up and down completely randomly.
Pair Corralation between Fresenius Medical and Zoom Video
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 3.92 times more return on investment than Zoom Video. However, Fresenius Medical is 3.92 times more volatile than Zoom Video Communications. It trades about 0.24 of its potential returns per unit of risk. Zoom Video Communications is currently generating about -0.21 per unit of risk. If you would invest 10,945 in Fresenius Medical Care on October 16, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Zoom Video Communications
Performance |
| Timeline |
| Fresenius Medical Care |
| Zoom Video Communications |
Fresenius Medical and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Zoom Video
The main advantage of trading using opposite Fresenius Medical and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video's long position.| Fresenius Medical vs. ON Semiconductor | Fresenius Medical vs. Cardinal Health, | Fresenius Medical vs. Iron Mountain Incorporated | Fresenius Medical vs. Healthpeak Properties |
| Zoom Video vs. Hormel Foods | Zoom Video vs. Fidelity National Information | Zoom Video vs. Fresenius Medical Care | Zoom Video vs. G2D Investments |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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