Correlation Between Iron Mountain and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Iron Mountain 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 Iron Mountain and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iron Mountain Incorporated and Fresenius Medical Care, you can compare the effects of market volatilities on Iron Mountain 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 Iron Mountain with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and Fresenius Medical.
Diversification Opportunities for Iron Mountain and Fresenius Medical
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Iron and Fresenius is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated 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 Iron Mountain 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 Iron Mountain Incorporated 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 Iron Mountain i.e., Iron Mountain and Fresenius Medical go up and down completely randomly.
Pair Corralation between Iron Mountain and Fresenius Medical
Assuming the 90 days trading horizon Iron Mountain Incorporated is expected to generate 0.93 times more return on investment than Fresenius Medical. However, Iron Mountain Incorporated is 1.07 times less risky than Fresenius Medical. It trades about 0.18 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.07 per unit of risk. If you would invest 32,878 in Iron Mountain Incorporated on October 16, 2024 and sell it today you would earn a total of 28,130 from holding Iron Mountain Incorporated or generate 85.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 64.39% |
| Values | Daily Returns |
Iron Mountain Incorporated vs. Fresenius Medical Care
Performance |
| Timeline |
| Iron Mountain |
| Fresenius Medical Care |
Iron Mountain and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iron Mountain and Fresenius Medical
The main advantage of trading using opposite Iron Mountain and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain 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.| Iron Mountain vs. Applied Materials, | Iron Mountain vs. Fair Isaac | Iron Mountain vs. Westinghouse Air Brake | Iron Mountain vs. Cardinal Health, |
| Fresenius Medical vs. KB Financial Group | Fresenius Medical vs. Verizon Communications | Fresenius Medical vs. ICICI Bank Limited | Fresenius Medical vs. Credit Acceptance |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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