Correlation Between Fresenius and American Shared
Can any of the company-specific risk be diversified away by investing in both Fresenius and American Shared 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 American Shared 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 American Shared Hospital, you can compare the effects of market volatilities on Fresenius and American Shared 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 American Shared. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius and American Shared.
Diversification Opportunities for Fresenius and American Shared
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fresenius and American is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and American Shared Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shared Hospital 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 American Shared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shared Hospital has no effect on the direction of Fresenius i.e., Fresenius and American Shared go up and down completely randomly.
Pair Corralation between Fresenius and American Shared
Assuming the 90 days horizon Fresenius is expected to generate 1.11 times less return on investment than American Shared. But when comparing it to its historical volatility, Fresenius SE Co is 1.55 times less risky than American Shared. It trades about 0.05 of its potential returns per unit of risk. American Shared Hospital is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 265.00 in American Shared Hospital on August 31, 2024 and sell it today you would earn a total of 57.00 from holding American Shared Hospital or generate 21.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Fresenius SE Co vs. American Shared Hospital
Performance |
| Timeline |
| Fresenius SE |
| American Shared Hospital |
Fresenius and American Shared Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius and American Shared
The main advantage of trading using opposite Fresenius and American Shared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius position performs unexpectedly, American Shared 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 American Shared will offset losses from the drop in American Shared's long position.| Fresenius vs. Jack Nathan Medical | Fresenius vs. Medical Facilities | Fresenius vs. Ramsay Health Care | Fresenius vs. Nova Leap Health |
| American Shared vs. Ramsay Health Care | American Shared vs. Medical Facilities | American Shared vs. Jack Nathan Medical | American Shared vs. Fresenius SE Co |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |