Correlation Between Fresenius and Surgery Partners

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

Diversification Opportunities for Fresenius and Surgery Partners

0.86

Correlation Coefficient

Fresenius  Surgery Partners

Very poor diversification

The 3 months correlation between Fresenius and Surgery is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and Surgery Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgery Partners 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 Surgery Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgery Partners has no effect on the direction of Fresenius i.e., Fresenius and Surgery Partners go up and down completely randomly.

Pair Corralation between Fresenius and Surgery Partners

Assuming the 90 days horizon Fresenius SE Co is expected to under-perform the Surgery Partners. But the pink sheet apears to be less risky and, when comparing its historical volatility, Fresenius SE Co is 2.77 times less risky than Surgery Partners. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Surgery Partners is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,146  in Surgery Partners on October 6, 2024 and sell it today you would lose (17.00) from holding Surgery Partners or give up 0.79% 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.  Surgery Partners

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.

Surgery Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Surgery Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Fresenius and Surgery Partners

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

The idea behind Fresenius SE Co and Surgery Partners 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.