Correlation Between Fresenius Medical and Flow Traders

Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Flow Traders 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 Fresenius Medical and Flow Traders into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fresenius Medical Care and Flow Traders NV, you can compare the effects of market volatilities on Fresenius Medical and Flow Traders 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 Fresenius Medical with a short position of Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Flow Traders.

Diversification Opportunities for Fresenius Medical and Flow Traders

0.41

Correlation Coefficient

Fresenius Medical  Flow Traders

Very weak diversification

The 3 months correlation between Fresenius and Flow is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Flow Traders NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders NV and Fresenius Medical 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 Fresenius Medical Care are associated (or correlated) with Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders NV has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Flow Traders go up and down completely randomly.

Pair Corralation between Fresenius Medical and Flow Traders

Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 1.0 times more return on investment than Flow Traders. However, Fresenius Medical Care is 1.0 times less risky than Flow Traders. It trades about 0.04 of its potential returns per unit of risk. Flow Traders NV is currently generating about 0.03 per unit of risk. If you would invest  3,516  in Fresenius Medical Care on December 1, 2024 and sell it today you would earn a total of  1,115  from holding Fresenius Medical Care or generate 31.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Fresenius Medical Care  vs.  Flow Traders NV

Fresenius Medical Care

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fresenius Medical Care are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fresenius Medical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Flow Traders NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flow Traders NV are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Flow Traders unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fresenius Medical and Flow Traders

The main advantage of trading using opposite Fresenius Medical and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.

The idea behind Fresenius Medical Care and Flow Traders NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.