Correlation Between Fresenius and Fresenius

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

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

Diversification Opportunities for Fresenius and Fresenius

0.81

Correlation Coefficient

Fresenius  Fresenius

Very poor diversification

The 3 months correlation between Fresenius and Fresenius is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE and Fresenius 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 SE Co are associated (or correlated) with Fresenius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius SE has no effect on the direction of Fresenius i.e., Fresenius and Fresenius go up and down completely randomly.

Pair Corralation between Fresenius and Fresenius

Assuming the 90 days horizon Fresenius SE Co is expected to under-perform the Fresenius. In addition to that, Fresenius is 1.02 times more volatile than Fresenius SE Co. It trades about -0.22 of its total potential returns per unit of risk. Fresenius SE Co is currently generating about -0.16 per unit of volatility. If you would invest  899.00  in Fresenius SE Co on October 6, 2024 and sell it today you would lose (33.00) from holding Fresenius SE Co or give up 3.67% of portfolio value over 90 days.

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

Fresenius SE Co  vs.  Fresenius SE Co

Fresenius SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fresenius SE Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Fresenius SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fresenius SE Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Fresenius 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 and Fresenius

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

The idea behind Fresenius SE Co and Fresenius SE Co 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.