Correlation Between Straumann Holding and Fresenius
Can any of the company-specific risk be diversified away by investing in both Straumann Holding 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 Straumann Holding and Fresenius into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Straumann Holding AG and Fresenius SE Co, you can compare the effects of market volatilities on Straumann Holding 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 Straumann Holding with a short position of Fresenius. Check out your portfolio center. Please also check ongoing floating volatility patterns of Straumann Holding and Fresenius.
Diversification Opportunities for Straumann Holding and Fresenius
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Straumann and Fresenius is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Straumann Holding AG and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE and Straumann Holding 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 Straumann Holding AG 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 Straumann Holding i.e., Straumann Holding and Fresenius go up and down completely randomly.
Pair Corralation between Straumann Holding and Fresenius
Assuming the 90 days horizon Straumann Holding AG is expected to under-perform the Fresenius. In addition to that, Straumann Holding is 1.49 times more volatile than Fresenius SE Co. It trades about -0.04 of its total potential returns per unit of risk. Fresenius SE Co is currently generating about 0.08 per unit of volatility. If you would invest 701.00 in Fresenius SE Co on August 29, 2024 and sell it today you would earn a total of 179.00 from holding Fresenius SE Co or generate 25.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Straumann Holding AG vs. Fresenius SE Co
Performance |
| Timeline |
| Straumann Holding |
| Fresenius SE |
Straumann Holding and Fresenius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Straumann Holding and Fresenius
The main advantage of trading using opposite Straumann Holding and Fresenius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Straumann Holding 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.| Straumann Holding vs. Sysmex Corp | Straumann Holding vs. Coloplast AS | Straumann Holding vs. Essilor International SA | Straumann Holding vs. EssilorLuxottica Socit anonyme |
| Fresenius vs. Jack Nathan Medical | Fresenius vs. Medical Facilities | Fresenius vs. Ramsay Health Care | Fresenius vs. Nova Leap Health |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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