Correlation Between Fresenius and FRESENIUS SECO
Can any of the company-specific risk be diversified away by investing in both Fresenius and FRESENIUS SECO 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 SECO 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 SECO ADR, you can compare the effects of market volatilities on Fresenius and FRESENIUS SECO 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 SECO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius and FRESENIUS SECO.
Diversification Opportunities for Fresenius and FRESENIUS SECO
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fresenius and FRESENIUS is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and FRESENIUS SECO ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRESENIUS SECO ADR 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 SECO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRESENIUS SECO ADR has no effect on the direction of Fresenius i.e., Fresenius and FRESENIUS SECO go up and down completely randomly.
Pair Corralation between Fresenius and FRESENIUS SECO
Assuming the 90 days horizon Fresenius is expected to generate 1.04 times less return on investment than FRESENIUS SECO. But when comparing it to its historical volatility, Fresenius SE Co is 1.16 times less risky than FRESENIUS SECO. It trades about 0.04 of its potential returns per unit of risk. FRESENIUS SECO ADR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 631.00 in FRESENIUS SECO ADR on September 3, 2024 and sell it today you would earn a total of 179.00 from holding FRESENIUS SECO ADR or generate 28.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius SE Co vs. FRESENIUS SECO ADR
Performance |
| Timeline |
| Fresenius SE |
| FRESENIUS SECO ADR |
Fresenius and FRESENIUS SECO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius and FRESENIUS SECO
The main advantage of trading using opposite Fresenius and FRESENIUS SECO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius position performs unexpectedly, FRESENIUS SECO 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 SECO will offset losses from the drop in FRESENIUS SECO's long position.| Fresenius vs. Superior Plus Corp | Fresenius vs. NMI Holdings | Fresenius vs. Origin Agritech | Fresenius vs. SIVERS SEMICONDUCTORS AB |
| FRESENIUS SECO vs. Superior Plus Corp | FRESENIUS SECO vs. NMI Holdings | FRESENIUS SECO vs. Origin Agritech | FRESENIUS SECO vs. SIVERS SEMICONDUCTORS AB |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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