Correlation Between Fresenius and US Physicalrapy
Can any of the company-specific risk be diversified away by investing in both Fresenius and US Physicalrapy 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 US Physicalrapy 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 US Physicalrapy, you can compare the effects of market volatilities on Fresenius and US Physicalrapy 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 US Physicalrapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius and US Physicalrapy.
Diversification Opportunities for Fresenius and US Physicalrapy
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fresenius and USPH is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and US Physicalrapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Physicalrapy 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 US Physicalrapy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Physicalrapy has no effect on the direction of Fresenius i.e., Fresenius and US Physicalrapy go up and down completely randomly.
Pair Corralation between Fresenius and US Physicalrapy
Assuming the 90 days horizon Fresenius SE Co is expected to generate 0.98 times more return on investment than US Physicalrapy. However, Fresenius SE Co is 1.02 times less risky than US Physicalrapy. It trades about -0.22 of its potential returns per unit of risk. US Physicalrapy is currently generating about -0.42 per unit of risk. If you would invest 3,466 in Fresenius SE Co on October 6, 2024 and sell it today you would lose (181.00) from holding Fresenius SE Co or give up 5.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fresenius SE Co vs. US Physicalrapy
Performance |
Timeline |
Fresenius SE |
US Physicalrapy |
Fresenius and US Physicalrapy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fresenius and US Physicalrapy
The main advantage of trading using opposite Fresenius and US Physicalrapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius position performs unexpectedly, US Physicalrapy 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 US Physicalrapy will offset losses from the drop in US Physicalrapy's long position.Fresenius vs. Medical Facilities | Fresenius vs. Sienna Senior Living | Fresenius vs. Regional Health Properties | Fresenius vs. WashTec AG |
US Physicalrapy vs. Acadia Healthcare | US Physicalrapy vs. Tenet Healthcare | US Physicalrapy vs. HCA Holdings | US Physicalrapy vs. DaVita HealthCare Partners |
Check out your portfolio center.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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