Correlation Between Fresenius Medical and Smartfit Escola

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

Diversification Opportunities for Fresenius Medical and Smartfit Escola

0.74

Correlation Coefficient

Fresenius Medical  Smartfit Escola

Poor diversification

The 3 months correlation between Fresenius and Smartfit is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Smartfit Escola de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smartfit Escola de 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 Smartfit Escola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smartfit Escola de has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Smartfit Escola go up and down completely randomly.

Pair Corralation between Fresenius Medical and Smartfit Escola

If you would invest  10,945  in Fresenius Medical Care on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Fresenius Medical Care or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.44%
Values	Daily Returns

Fresenius Medical Care  vs.  Smartfit Escola de

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.

Smartfit Escola de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smartfit Escola de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Fresenius Medical and Smartfit Escola

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

The idea behind Fresenius Medical Care and Smartfit Escola de 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.