Correlation Between MoneysupermarketCom and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both MoneysupermarketCom 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 MoneysupermarketCom and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MoneysupermarketCom Group PLC and Fresenius Medical Care, you can compare the effects of market volatilities on MoneysupermarketCom 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 MoneysupermarketCom with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of MoneysupermarketCom and Fresenius Medical.
Diversification Opportunities for MoneysupermarketCom and Fresenius Medical
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MoneysupermarketCom and Fresenius is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding MoneysupermarketCom Group 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 MoneysupermarketCom 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 MoneysupermarketCom Group 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 MoneysupermarketCom i.e., MoneysupermarketCom and Fresenius Medical go up and down completely randomly.
Pair Corralation between MoneysupermarketCom and Fresenius Medical
Assuming the 90 days trading horizon MoneysupermarketCom is expected to generate 3.01 times less return on investment than Fresenius Medical. But when comparing it to its historical volatility, MoneysupermarketCom Group PLC is 1.18 times less risky than Fresenius Medical. It trades about 0.02 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,812 in Fresenius Medical Care on September 14, 2024 and sell it today you would earn a total of 1,733 from holding Fresenius Medical Care or generate 61.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MoneysupermarketCom Group PLC vs. Fresenius Medical Care
Performance |
| Timeline |
| MoneysupermarketCom |
| Fresenius Medical Care |
MoneysupermarketCom and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MoneysupermarketCom and Fresenius Medical
The main advantage of trading using opposite MoneysupermarketCom and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MoneysupermarketCom 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.| MoneysupermarketCom vs. International Biotechnology Trust | MoneysupermarketCom vs. SMA Solar Technology | MoneysupermarketCom vs. Universal Display Corp | MoneysupermarketCom vs. Raytheon Technologies Corp |
| Fresenius Medical vs. Monster Beverage Corp | Fresenius Medical vs. MoneysupermarketCom Group PLC | Fresenius Medical vs. Albion Technology General | Fresenius Medical vs. Ocean Harvest Technology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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