Correlation Between Richter Gedeon and Fresenius
Can any of the company-specific risk be diversified away by investing in both Richter Gedeon 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 Richter Gedeon and Fresenius into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Richter Gedeon Vegyszeti and Fresenius SE Co, you can compare the effects of market volatilities on Richter Gedeon 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 Richter Gedeon with a short position of Fresenius. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richter Gedeon and Fresenius.
Diversification Opportunities for Richter Gedeon and Fresenius
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Richter and Fresenius is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Richter Gedeon Vegyszeti and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE and Richter Gedeon 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 Richter Gedeon Vegyszeti 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 Richter Gedeon i.e., Richter Gedeon and Fresenius go up and down completely randomly.
Pair Corralation between Richter Gedeon and Fresenius
Assuming the 90 days trading horizon Richter Gedeon Vegyszeti is expected to generate 1.01 times more return on investment than Fresenius. However, Richter Gedeon is 1.01 times more volatile than Fresenius SE Co. It trades about 0.18 of its potential returns per unit of risk. Fresenius SE Co is currently generating about 0.07 per unit of risk. If you would invest 2,526 in Richter Gedeon Vegyszeti on December 1, 2024 and sell it today you would earn a total of 180.00 from holding Richter Gedeon Vegyszeti or generate 7.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Richter Gedeon Vegyszeti vs. Fresenius SE Co
Performance |
| Timeline |
| Richter Gedeon Vegyszeti |
| Fresenius SE |
Richter Gedeon and Fresenius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Richter Gedeon and Fresenius
The main advantage of trading using opposite Richter Gedeon and Fresenius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Richter Gedeon 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.| Richter Gedeon vs. GOLD ROAD RES | Richter Gedeon vs. Gol Intelligent Airlines | Richter Gedeon vs. COPLAND ROAD CAPITAL | Richter Gedeon vs. BROADSTNET LEADL 00025 |
| Fresenius vs. United Utilities Group | Fresenius vs. NORDHEALTH AS NK | Fresenius vs. CARDINAL HEALTH | Fresenius vs. UNITED UTILITIES GP |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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