Correlation Between PDG Realty and Fresenius Medical

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

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

Diversification Opportunities for PDG Realty and Fresenius Medical

-0.01

Correlation Coefficient

PDG Realty  Fresenius Medical

Good diversification

The 3 months correlation between PDG and Fresenius is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding PDG Realty SA and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care and PDG Realty 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 PDG Realty SA are associated (or correlated) with Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of PDG Realty i.e., PDG Realty and Fresenius Medical go up and down completely randomly.

Pair Corralation between PDG Realty and Fresenius Medical

If you would invest  10,945  in Fresenius Medical Care on October 23, 2024 and sell it today you would earn a total of  2,744  from holding Fresenius Medical Care or generate 25.07% return on investment over 90 days.

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

PDG Realty SA  vs.  Fresenius Medical Care

PDG Realty SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PDG Realty SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PDG Realty is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Fresenius Medical Care

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fresenius Medical Care are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fresenius Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PDG Realty and Fresenius Medical

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

The idea behind PDG Realty SA and Fresenius Medical Care 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.