Correlation Between Hyundai and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Hyundai 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 Hyundai and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Fresenius Medical Care, you can compare the effects of market volatilities on Hyundai 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 Hyundai with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Fresenius Medical.
Diversification Opportunities for Hyundai and Fresenius Medical
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Fresenius is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor 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 Hyundai 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 Hyundai Motor 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 Hyundai i.e., Hyundai and Fresenius Medical go up and down completely randomly.
Pair Corralation between Hyundai and Fresenius Medical
Assuming the 90 days trading horizon Hyundai is expected to generate 1.18 times less return on investment than Fresenius Medical. In addition to that, Hyundai is 1.48 times more volatile than Fresenius Medical Care. It trades about 0.03 of its total potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.04 per unit of volatility. If you would invest 3,918 in Fresenius Medical Care on August 29, 2024 and sell it today you would earn a total of 312.00 from holding Fresenius Medical Care or generate 7.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Fresenius Medical Care
Performance |
| Timeline |
| Hyundai Motor |
| Fresenius Medical Care |
Hyundai and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Fresenius Medical
The main advantage of trading using opposite Hyundai and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai 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.| Hyundai vs. Ondine Biomedical | Hyundai vs. Europa Metals | Hyundai vs. Lendinvest PLC | Hyundai vs. Neometals |
| Fresenius Medical vs. Lendinvest PLC | Fresenius Medical vs. Neometals | Fresenius Medical vs. Coor Service Management | Fresenius Medical vs. Albion Technology General |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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