Correlation Between Fresenius Medical and Invesco SP

Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Invesco SP 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 Invesco SP 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 Invesco SP 500, you can compare the effects of market volatilities on Fresenius Medical and Invesco SP 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 Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Invesco SP.

Diversification Opportunities for Fresenius Medical and Invesco SP

-0.12

Correlation Coefficient

Fresenius Medical  Invesco SP

Good diversification

The 3 months correlation between Fresenius and Invesco is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Invesco SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP 500 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 Invesco SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP 500 has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Invesco SP go up and down completely randomly.

Pair Corralation between Fresenius Medical and Invesco SP

Considering the 90-day investment horizon Fresenius Medical Care is expected to generate 1.44 times more return on investment than Invesco SP. However, Fresenius Medical is 1.44 times more volatile than Invesco SP 500. It trades about 0.1 of its potential returns per unit of risk. Invesco SP 500 is currently generating about -0.06 per unit of risk. If you would invest  2,271  in Fresenius Medical Care on December 29, 2024 and sell it today you would earn a total of  207.00  from holding Fresenius Medical Care or generate 9.11% return on investment over 90 days.

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

Fresenius Medical Care  vs.  Invesco SP 500

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 primary indicators, Fresenius Medical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Invesco SP 500

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco SP 500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Invesco SP is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fresenius Medical and Invesco SP

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

The idea behind Fresenius Medical Care and Invesco SP 500 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 CEOs Directory module to screen CEOs from public companies around the world.