Correlation Between Fresenius and Richter Gedeon
Can any of the company-specific risk be diversified away by investing in both Fresenius and Richter Gedeon 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 Richter Gedeon 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 Richter Gedeon Vegyszeti, you can compare the effects of market volatilities on Fresenius and Richter Gedeon 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 Richter Gedeon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius and Richter Gedeon.
Diversification Opportunities for Fresenius and Richter Gedeon
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fresenius and Richter is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and Richter Gedeon Vegyszeti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richter Gedeon Vegyszeti 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 Richter Gedeon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richter Gedeon Vegyszeti has no effect on the direction of Fresenius i.e., Fresenius and Richter Gedeon go up and down completely randomly.
Pair Corralation between Fresenius and Richter Gedeon
Assuming the 90 days horizon Fresenius SE Co is expected to generate 0.68 times more return on investment than Richter Gedeon. However, Fresenius SE Co is 1.47 times less risky than Richter Gedeon. It trades about 0.13 of its potential returns per unit of risk. Richter Gedeon Vegyszeti is currently generating about 0.02 per unit of risk. If you would invest 2,556 in Fresenius SE Co on September 3, 2024 and sell it today you would earn a total of 773.00 from holding Fresenius SE Co or generate 30.24% 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. Richter Gedeon Vegyszeti
Performance |
| Timeline |
| Fresenius SE |
| Richter Gedeon Vegyszeti |
Fresenius and Richter Gedeon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius and Richter Gedeon
The main advantage of trading using opposite Fresenius and Richter Gedeon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius position performs unexpectedly, Richter Gedeon 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 Richter Gedeon will offset losses from the drop in Richter Gedeon's long position.| Fresenius vs. Superior Plus Corp | Fresenius vs. NMI Holdings | Fresenius vs. Origin Agritech | Fresenius 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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