Correlation Between Fresenius and Joint Corp
Can any of the company-specific risk be diversified away by investing in both Fresenius and Joint Corp 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 Joint Corp 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 The Joint Corp, you can compare the effects of market volatilities on Fresenius and Joint Corp 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 Joint Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius and Joint Corp.
Diversification Opportunities for Fresenius and Joint Corp
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fresenius and Joint is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and The Joint Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Corp 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 Joint Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Corp has no effect on the direction of Fresenius i.e., Fresenius and Joint Corp go up and down completely randomly.
Pair Corralation between Fresenius and Joint Corp
Assuming the 90 days horizon Fresenius SE Co is expected to under-perform the Joint Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Fresenius SE Co is 2.31 times less risky than Joint Corp. The pink sheet trades about -0.24 of its potential returns per unit of risk. The The Joint Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,120 in The Joint Corp on August 29, 2024 and sell it today you would earn a total of 53.00 from holding The Joint Corp or generate 4.73% 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. The Joint Corp
Performance |
| Timeline |
| Fresenius SE |
| Joint Corp |
Fresenius and Joint Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius and Joint Corp
The main advantage of trading using opposite Fresenius and Joint Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius position performs unexpectedly, Joint Corp 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 Joint Corp will offset losses from the drop in Joint Corp's long position.| Fresenius vs. Jack Nathan Medical | Fresenius vs. Medical Facilities | Fresenius vs. Ramsay Health Care | Fresenius vs. Nova Leap Health |
| Joint Corp vs. Encompass Health Corp | Joint Corp vs. Pennant Group | Joint Corp vs. Enhabit | Joint Corp vs. ModivCare |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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