Correlation Between Fresenius Medical and Lumen Technologies,

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

Diversification Opportunities for Fresenius Medical and Lumen Technologies,

-0.46

Correlation Coefficient

Fresenius Medical  Lumen Technologies,

Very good diversification

The 3 months correlation between Fresenius and Lumen is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Lumen Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumen Technologies, 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 Lumen Technologies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumen Technologies, has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Lumen Technologies, go up and down completely randomly.

Pair Corralation between Fresenius Medical and Lumen Technologies,

Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 0.64 times more return on investment than Lumen Technologies,. However, Fresenius Medical Care is 1.55 times less risky than Lumen Technologies,. It trades about 0.11 of its potential returns per unit of risk. Lumen Technologies, is currently generating about 0.01 per unit of risk. If you would invest  11,322  in Fresenius Medical Care on October 23, 2024 and sell it today you would earn a total of  2,367  from holding Fresenius Medical Care or generate 20.91% return on investment over 90 days.

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

Fresenius Medical Care  vs.  Lumen Technologies,

Fresenius Medical Care

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fresenius Medical Care are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fresenius Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Lumen Technologies,

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Fresenius Medical and Lumen Technologies,

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

The idea behind Fresenius Medical Care and Lumen Technologies, 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.