Correlation Between Samsung Electronics and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics 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 Samsung Electronics and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Fresenius Medical Care, you can compare the effects of market volatilities on Samsung Electronics 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 Samsung Electronics with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Fresenius Medical.
Diversification Opportunities for Samsung Electronics and Fresenius Medical
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Fresenius is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co 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 Samsung Electronics 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 Samsung Electronics Co 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 Samsung Electronics i.e., Samsung Electronics and Fresenius Medical go up and down completely randomly.
Pair Corralation between Samsung Electronics and Fresenius Medical
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Fresenius Medical. In addition to that, Samsung Electronics is 1.67 times more volatile than Fresenius Medical Care. It trades about -0.1 of its total potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.26 per unit of volatility. If you would invest 3,899 in Fresenius Medical Care on November 6, 2024 and sell it today you would earn a total of 873.00 from holding Fresenius Medical Care or generate 22.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Fresenius Medical Care
Performance |
| Timeline |
| Samsung Electronics |
| Fresenius Medical Care |
Samsung Electronics and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Fresenius Medical
The main advantage of trading using opposite Samsung Electronics and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics 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.| Samsung Electronics vs. McEwen Mining | Samsung Electronics vs. Eco Animal Health | Samsung Electronics vs. Primary Health Properties | Samsung Electronics vs. Coeur Mining |
| Fresenius Medical vs. Eastman Chemical Co | Fresenius Medical vs. Air Products Chemicals | Fresenius Medical vs. Summit Materials Cl | Fresenius Medical vs. Wheaton Precious Metals |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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