Correlation Between FRESENIUS SE+CO and Fresenius
Can any of the company-specific risk be diversified away by investing in both FRESENIUS SE+CO and Fresenius 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 SE+CO and Fresenius into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FRESENIUS SECO ADR and Fresenius SE Co, you can compare the effects of market volatilities on FRESENIUS SE+CO and Fresenius 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 SE+CO with a short position of Fresenius. Check out your portfolio center. Please also check ongoing floating volatility patterns of FRESENIUS SE+CO and Fresenius.
Diversification Opportunities for FRESENIUS SE+CO and Fresenius
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FRESENIUS and Fresenius is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding FRESENIUS SECO ADR and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE and FRESENIUS SE+CO 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 SECO ADR are associated (or correlated) with Fresenius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius SE has no effect on the direction of FRESENIUS SE+CO i.e., FRESENIUS SE+CO and Fresenius go up and down completely randomly.
Pair Corralation between FRESENIUS SE+CO and Fresenius
Assuming the 90 days trading horizon FRESENIUS SECO ADR is expected to generate 1.47 times more return on investment than Fresenius. However, FRESENIUS SE+CO is 1.47 times more volatile than Fresenius SE Co. It trades about 0.09 of its potential returns per unit of risk. Fresenius SE Co is currently generating about 0.07 per unit of risk. If you would invest 915.00 in FRESENIUS SECO ADR on December 1, 2024 and sell it today you would earn a total of 45.00 from holding FRESENIUS SECO ADR or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FRESENIUS SECO ADR vs. Fresenius SE Co
Performance |
| Timeline |
| FRESENIUS SECO ADR |
| Fresenius SE |
FRESENIUS SE+CO and Fresenius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FRESENIUS SE+CO and Fresenius
The main advantage of trading using opposite FRESENIUS SE+CO and Fresenius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FRESENIUS SE+CO position performs unexpectedly, Fresenius 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 will offset losses from the drop in Fresenius' long position.| FRESENIUS SE+CO vs. UNITED INTERNET N | FRESENIUS SE+CO vs. BANKINTER ADR 2007 | FRESENIUS SE+CO vs. Takark Jelzlogbank Nyrt | FRESENIUS SE+CO vs. JSC Halyk bank |
| Fresenius vs. United Utilities Group | Fresenius vs. NORDHEALTH AS NK | Fresenius vs. CARDINAL HEALTH | Fresenius vs. UNITED UTILITIES GP |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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