Correlation Between Livermore Investments and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Livermore Investments 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 Livermore Investments and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Livermore Investments Group and Fresenius Medical Care, you can compare the effects of market volatilities on Livermore Investments 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 Livermore Investments with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Livermore Investments and Fresenius Medical.
Diversification Opportunities for Livermore Investments and Fresenius Medical
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Livermore and Fresenius is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Livermore Investments Group 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 Livermore Investments 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 Livermore Investments Group 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 Livermore Investments i.e., Livermore Investments and Fresenius Medical go up and down completely randomly.
Pair Corralation between Livermore Investments and Fresenius Medical
Assuming the 90 days trading horizon Livermore Investments is expected to generate 4.75 times less return on investment than Fresenius Medical. But when comparing it to its historical volatility, Livermore Investments Group is 2.41 times less risky than Fresenius Medical. It trades about 0.22 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 3,679 in Fresenius Medical Care on September 4, 2024 and sell it today you would earn a total of 629.00 from holding Fresenius Medical Care or generate 17.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Livermore Investments Group vs. Fresenius Medical Care
Performance |
| Timeline |
| Livermore Investments |
| Fresenius Medical Care |
Livermore Investments and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Livermore Investments and Fresenius Medical
The main advantage of trading using opposite Livermore Investments and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Livermore Investments 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.| Livermore Investments vs. Evolution Gaming Group | Livermore Investments vs. BW Offshore | Livermore Investments vs. SBM Offshore NV | Livermore Investments vs. Vienna Insurance Group |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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