Correlation Between Fresenius and Extendicare
Can any of the company-specific risk be diversified away by investing in both Fresenius and Extendicare 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 Extendicare 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 Extendicare, you can compare the effects of market volatilities on Fresenius and Extendicare 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 Extendicare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius and Extendicare.
Diversification Opportunities for Fresenius and Extendicare
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fresenius and Extendicare is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and Extendicare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extendicare 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 Extendicare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extendicare has no effect on the direction of Fresenius i.e., Fresenius and Extendicare go up and down completely randomly.
Pair Corralation between Fresenius and Extendicare
If you would invest 797.00 in Fresenius SE Co on August 24, 2024 and sell it today you would earn a total of 77.00 from holding Fresenius SE Co or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.8% |
| Values | Daily Returns |
Fresenius SE Co vs. Extendicare
Performance |
| Timeline |
| Fresenius SE |
| Extendicare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fresenius and Extendicare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius and Extendicare
The main advantage of trading using opposite Fresenius and Extendicare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius position performs unexpectedly, Extendicare 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 Extendicare will offset losses from the drop in Extendicare's long position.| Fresenius vs. Novo Integrated Sciences | Fresenius vs. Dear Cashmere Holding | Fresenius vs. Coastal Capital Acq | Fresenius vs. One World Universe |
| Extendicare vs. Ramsay Health Care | Extendicare vs. Jack Nathan Medical | Extendicare vs. Nova Leap Health | Extendicare 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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