Correlation Between Gamma Communications and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Gamma Communications and Fresenius Medical 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 Gamma Communications and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications PLC and Fresenius Medical Care, you can compare the effects of market volatilities on Gamma Communications and Fresenius Medical 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 Gamma Communications with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Fresenius Medical.
Diversification Opportunities for Gamma Communications and Fresenius Medical
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gamma and Fresenius is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications PLC and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care and Gamma Communications 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 Gamma Communications PLC are associated (or correlated) with Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of Gamma Communications i.e., Gamma Communications and Fresenius Medical go up and down completely randomly.
Pair Corralation between Gamma Communications and Fresenius Medical
Assuming the 90 days trading horizon Gamma Communications PLC is expected to under-perform the Fresenius Medical. In addition to that, Gamma Communications is 1.16 times more volatile than Fresenius Medical Care. It trades about -0.48 of its total potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.18 per unit of volatility. If you would invest 4,429 in Fresenius Medical Care on October 26, 2024 and sell it today you would earn a total of 228.00 from holding Fresenius Medical Care or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications PLC vs. Fresenius Medical Care
Performance |
| Timeline |
| Gamma Communications PLC |
| Fresenius Medical Care |
Gamma Communications and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Fresenius Medical
The main advantage of trading using opposite Gamma Communications and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications position performs unexpectedly, Fresenius Medical 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 Medical will offset losses from the drop in Fresenius Medical's long position.| Gamma Communications vs. SupplyMe Capital PLC | Gamma Communications vs. Lloyds Banking Group | Gamma Communications vs. Premier African Minerals | Gamma Communications vs. SANTANDER UK 8 |
| Fresenius Medical vs. Auto Trader Group | Fresenius Medical vs. Qurate Retail Series | Fresenius Medical vs. Verizon Communications | Fresenius Medical vs. Gamma Communications PLC |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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