Correlation Between Fresenius and JD HEALTH
Can any of the company-specific risk be diversified away by investing in both Fresenius and JD HEALTH 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 JD HEALTH 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 JD HEALTH INTL, you can compare the effects of market volatilities on Fresenius and JD HEALTH 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 JD HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius and JD HEALTH.
Diversification Opportunities for Fresenius and JD HEALTH
Significant diversification
The 3 months correlation between Fresenius and 8ZN is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and JD HEALTH INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD HEALTH INTL 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 JD HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD HEALTH INTL has no effect on the direction of Fresenius i.e., Fresenius and JD HEALTH go up and down completely randomly.
Pair Corralation between Fresenius and JD HEALTH
Assuming the 90 days trading horizon Fresenius is expected to generate 1.73 times less return on investment than JD HEALTH. But when comparing it to its historical volatility, Fresenius SE Co is 3.02 times less risky than JD HEALTH. It trades about 0.08 of its potential returns per unit of risk. JD HEALTH INTL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 306.00 in JD HEALTH INTL on September 3, 2024 and sell it today you would earn a total of 44.00 from holding JD HEALTH INTL or generate 14.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius SE Co vs. JD HEALTH INTL
Performance |
| Timeline |
| Fresenius SE |
| JD HEALTH INTL |
Fresenius and JD HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius and JD HEALTH
The main advantage of trading using opposite Fresenius and JD HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius position performs unexpectedly, JD HEALTH 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 JD HEALTH will offset losses from the drop in JD HEALTH's long position.| Fresenius vs. ITALIAN WINE BRANDS | Fresenius vs. VIVA WINE GROUP | Fresenius vs. DEVRY EDUCATION GRP | Fresenius vs. Laureate Education |
| JD HEALTH vs. ZURICH INSURANCE GROUP | JD HEALTH vs. Ramsay Health Care | JD HEALTH vs. QBE Insurance Group | JD HEALTH vs. Zurich Insurance Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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