Correlation Between Fresenius Medical and ATI Physical

Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and ATI Physical 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 ATI Physical 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 ATI Physical Therapy, you can compare the effects of market volatilities on Fresenius Medical and ATI Physical 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 ATI Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and ATI Physical.

Diversification Opportunities for Fresenius Medical and ATI Physical

-0.36

Correlation Coefficient

Fresenius Medical  ATI Physical

Very good diversification

The 3 months correlation between Fresenius and ATI is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and ATI Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATI Physical Therapy 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 ATI Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATI Physical Therapy has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and ATI Physical go up and down completely randomly.

Pair Corralation between Fresenius Medical and ATI Physical

If you would invest  2,268  in Fresenius Medical Care on October 24, 2024 and sell it today you would earn a total of  41.00  from holding Fresenius Medical Care or generate 1.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

Fresenius Medical Care  vs.  ATI Physical Therapy

Fresenius Medical Care

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fresenius Medical Care are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Fresenius Medical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ATI Physical Therapy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATI Physical Therapy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Fresenius Medical and ATI Physical

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

The idea behind Fresenius Medical Care and ATI Physical Therapy 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.