Correlation Between Fresenius and MODIVCARE INC
Can any of the company-specific risk be diversified away by investing in both Fresenius and MODIVCARE INC 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 MODIVCARE INC 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 MODIVCARE INC DL 001, you can compare the effects of market volatilities on Fresenius and MODIVCARE INC 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 MODIVCARE INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius and MODIVCARE INC.
Diversification Opportunities for Fresenius and MODIVCARE INC
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fresenius and MODIVCARE is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and MODIVCARE INC DL 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MODIVCARE INC DL 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 MODIVCARE INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MODIVCARE INC DL has no effect on the direction of Fresenius i.e., Fresenius and MODIVCARE INC go up and down completely randomly.
Pair Corralation between Fresenius and MODIVCARE INC
Assuming the 90 days trading horizon Fresenius SE Co is expected to generate 0.21 times more return on investment than MODIVCARE INC. However, Fresenius SE Co is 4.77 times less risky than MODIVCARE INC. It trades about 0.07 of its potential returns per unit of risk. MODIVCARE INC DL 001 is currently generating about -0.01 per unit of risk. If you would invest 2,779 in Fresenius SE Co on September 14, 2024 and sell it today you would earn a total of 700.00 from holding Fresenius SE Co or generate 25.19% 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. MODIVCARE INC DL 001
Performance |
| Timeline |
| Fresenius SE |
| MODIVCARE INC DL |
Fresenius and MODIVCARE INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius and MODIVCARE INC
The main advantage of trading using opposite Fresenius and MODIVCARE INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius position performs unexpectedly, MODIVCARE INC 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 MODIVCARE INC will offset losses from the drop in MODIVCARE INC's long position.| Fresenius vs. JD HEALTH INTL | Fresenius vs. Fresenius Medical Care | Fresenius vs. Sonic Healthcare Limited | Fresenius vs. Option Care Health |
| MODIVCARE INC vs. JD HEALTH INTL | MODIVCARE INC vs. Fresenius SE Co | MODIVCARE INC vs. Fresenius Medical Care | MODIVCARE INC vs. Sonic Healthcare Limited |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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