Correlation Between Fresenius and IMAC Holdings

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

Diversification Opportunities for Fresenius and IMAC Holdings

0.37

Correlation Coefficient

Fresenius  IMAC Holdings

Weak diversification

The 3 months correlation between Fresenius and IMAC is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and IMAC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMAC Holdings 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 IMAC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMAC Holdings has no effect on the direction of Fresenius i.e., Fresenius and IMAC Holdings go up and down completely randomly.

Pair Corralation between Fresenius and IMAC Holdings

Assuming the 90 days horizon Fresenius SE Co is expected to generate 0.24 times more return on investment than IMAC Holdings. However, Fresenius SE Co is 4.21 times less risky than IMAC Holdings. It trades about -0.04 of its potential returns per unit of risk. IMAC Holdings is currently generating about -0.11 per unit of risk. If you would invest  921.00  in Fresenius SE Co on September 3, 2024 and sell it today you would lose (36.00) from holding Fresenius SE Co or give up 3.91% of portfolio value over 90 days.

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

Fresenius SE Co  vs.  IMAC Holdings

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.

IMAC Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IMAC Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Fresenius and IMAC Holdings

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

The idea behind Fresenius SE Co and IMAC Holdings 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.