Correlation Between Fresenius and Sonova Holding
Can any of the company-specific risk be diversified away by investing in both Fresenius and Sonova Holding 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 Sonova Holding 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 Sonova Holding AG, you can compare the effects of market volatilities on Fresenius and Sonova Holding 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 Sonova Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius and Sonova Holding.
Diversification Opportunities for Fresenius and Sonova Holding
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fresenius and Sonova is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and Sonova Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonova Holding AG 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 Sonova Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonova Holding AG has no effect on the direction of Fresenius i.e., Fresenius and Sonova Holding go up and down completely randomly.
Pair Corralation between Fresenius and Sonova Holding
Assuming the 90 days horizon Fresenius SE Co is expected to generate 0.86 times more return on investment than Sonova Holding. However, Fresenius SE Co is 1.16 times less risky than Sonova Holding. It trades about -0.25 of its potential returns per unit of risk. Sonova Holding AG is currently generating about -0.35 per unit of risk. If you would invest 937.00 in Fresenius SE Co on August 28, 2024 and sell it today you would lose (66.00) from holding Fresenius SE Co or give up 7.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius SE Co vs. Sonova Holding AG
Performance |
| Timeline |
| Fresenius SE |
| Sonova Holding AG |
Fresenius and Sonova Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius and Sonova Holding
The main advantage of trading using opposite Fresenius and Sonova Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius position performs unexpectedly, Sonova Holding 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 Sonova Holding will offset losses from the drop in Sonova Holding's long position.| Fresenius vs. Jack Nathan Medical | Fresenius vs. Medical Facilities | Fresenius vs. Ramsay Health Care | Fresenius vs. Nova Leap Health |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets |