Correlation Between Fresenius and US Physical
Can any of the company-specific risk be diversified away by investing in both Fresenius and US Physical 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 US Physical 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 US Physical Therapy, you can compare the effects of market volatilities on Fresenius and US Physical 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 US Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius and US Physical.
Diversification Opportunities for Fresenius and US Physical
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fresenius and UPH is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and US Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Physical Therapy 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 US Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Physical Therapy has no effect on the direction of Fresenius i.e., Fresenius and US Physical go up and down completely randomly.
Pair Corralation between Fresenius and US Physical
Assuming the 90 days horizon Fresenius SE Co is expected to generate 0.64 times more return on investment than US Physical. However, Fresenius SE Co is 1.57 times less risky than US Physical. It trades about 0.55 of its potential returns per unit of risk. US Physical Therapy is currently generating about -0.13 per unit of risk. If you would invest 3,347 in Fresenius SE Co on October 24, 2024 and sell it today you would earn a total of 248.00 from holding Fresenius SE Co or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius SE Co vs. US Physical Therapy
Performance |
| Timeline |
| Fresenius SE |
| US Physical Therapy |
Fresenius and US Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius and US Physical
The main advantage of trading using opposite Fresenius and US Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius position performs unexpectedly, US Physical 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 US Physical will offset losses from the drop in US Physical's long position.| Fresenius vs. PennantPark Investment | Fresenius vs. Virtus Investment Partners | Fresenius vs. SEI INVESTMENTS | Fresenius vs. Lamar Advertising |
| US Physical vs. Fresenius SE Co | US Physical vs. Fresenius Medical Care | US Physical vs. Fresenius Medical Care | US Physical vs. Ramsay Health Care |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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