Correlation Between Fresenius and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Fresenius and Fresenius Medical 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 and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresenius SE Co and Fresenius Medical Care, you can compare the effects of market volatilities on Fresenius and Fresenius Medical 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 with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius and Fresenius Medical.
Diversification Opportunities for Fresenius and Fresenius Medical
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fresenius and Fresenius is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care and Fresenius 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 SE Co are associated (or correlated) with Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of Fresenius i.e., Fresenius and Fresenius Medical go up and down completely randomly.
Pair Corralation between Fresenius and Fresenius Medical
Assuming the 90 days horizon Fresenius is expected to generate 1.02 times less return on investment than Fresenius Medical. But when comparing it to its historical volatility, Fresenius SE Co is 2.43 times less risky than Fresenius Medical. It trades about 0.55 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,120 in Fresenius Medical Care on November 4, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius SE Co vs. Fresenius Medical Care
Performance |
| Timeline |
| Fresenius SE |
| Fresenius Medical Care |
Fresenius and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius and Fresenius Medical
The main advantage of trading using opposite Fresenius and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| Fresenius vs. AEON METALS LTD | Fresenius vs. Jacquet Metal Service | Fresenius vs. MCEWEN MINING INC | Fresenius vs. ADRIATIC METALS LS 013355 |
| Fresenius Medical vs. Clearside Biomedical | Fresenius Medical vs. GRENKELEASING Dusseldorf | Fresenius Medical vs. UNITED RENTALS | Fresenius Medical vs. FIRST SHIP LEASE |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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