Correlation Between Unifique Telecomunicaes and Fresenius Medical

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

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

Diversification Opportunities for Unifique Telecomunicaes and Fresenius Medical

0.45

Correlation Coefficient

Unifique Telecomunicaes  Fresenius Medical

Very weak diversification

The 3 months correlation between Unifique and Fresenius is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Unifique Telecomunicaes SA 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 Unifique Telecomunicaes 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 Unifique Telecomunicaes SA 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 Unifique Telecomunicaes i.e., Unifique Telecomunicaes and Fresenius Medical go up and down completely randomly.

Pair Corralation between Unifique Telecomunicaes and Fresenius Medical

Assuming the 90 days trading horizon Unifique Telecomunicaes SA is expected to under-perform the Fresenius Medical. In addition to that, Unifique Telecomunicaes is 1.23 times more volatile than Fresenius Medical Care. It trades about -0.01 of its total potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.04 per unit of volatility. If you would invest  9,479  in Fresenius Medical Care on October 9, 2024 and sell it today you would earn a total of  1,466  from holding Fresenius Medical Care or generate 15.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Unifique Telecomunicaes SA  vs.  Fresenius Medical Care

Unifique Telecomunicaes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unifique Telecomunicaes SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Fresenius Medical Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fresenius Medical Care has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Fresenius Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Unifique Telecomunicaes and Fresenius Medical

The main advantage of trading using opposite Unifique Telecomunicaes and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unifique Telecomunicaes 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.

The idea behind Unifique Telecomunicaes SA and Fresenius Medical Care 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..