Correlation Between ITALIAN WINE and Fresenius
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE and Fresenius 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 ITALIAN WINE and Fresenius into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and Fresenius SE Co, you can compare the effects of market volatilities on ITALIAN WINE and Fresenius 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 ITALIAN WINE with a short position of Fresenius. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and Fresenius.
Diversification Opportunities for ITALIAN WINE and Fresenius
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ITALIAN and Fresenius is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE and ITALIAN WINE 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 ITALIAN WINE BRANDS are associated (or correlated) with Fresenius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius SE has no effect on the direction of ITALIAN WINE i.e., ITALIAN WINE and Fresenius go up and down completely randomly.
Pair Corralation between ITALIAN WINE and Fresenius
Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to under-perform the Fresenius. In addition to that, ITALIAN WINE is 1.33 times more volatile than Fresenius SE Co. It trades about -0.01 of its total potential returns per unit of risk. Fresenius SE Co is currently generating about 0.04 per unit of volatility. If you would invest 2,577 in Fresenius SE Co on September 4, 2024 and sell it today you would earn a total of 764.00 from holding Fresenius SE Co or generate 29.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. Fresenius SE Co
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| Fresenius SE |
ITALIAN WINE and Fresenius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and Fresenius
The main advantage of trading using opposite ITALIAN WINE and Fresenius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE position performs unexpectedly, Fresenius 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 will offset losses from the drop in Fresenius' long position.| ITALIAN WINE vs. CHINA TONTINE WINES | ITALIAN WINE vs. Superior Plus Corp | ITALIAN WINE vs. NMI Holdings | ITALIAN WINE vs. Origin Agritech |
| Fresenius vs. COMMERCIAL VEHICLE | Fresenius vs. Motorcar Parts of | Fresenius vs. INTER CARS SA | Fresenius vs. Shin Etsu Chemical Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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