Correlation Between Fresenius and VITA 34

Can any of the company-specific risk be diversified away by investing in both Fresenius and VITA 34 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 VITA 34 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 VITA 34 AG, you can compare the effects of market volatilities on Fresenius and VITA 34 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 VITA 34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius and VITA 34.

Diversification Opportunities for Fresenius and VITA 34

0.0

Correlation Coefficient

Fresenius  VITA 34

Pay attention - limited upside

The 3 months correlation between Fresenius and VITA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and VITA 34 AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VITA 34 AG 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 VITA 34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VITA 34 AG has no effect on the direction of Fresenius i.e., Fresenius and VITA 34 go up and down completely randomly.

Pair Corralation between Fresenius and VITA 34

If you would invest  2,791  in Fresenius SE Co on January 28, 2024 and sell it today you would earn a total of  0.00  from holding Fresenius SE Co or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Fresenius SE Co  vs.  VITA 34 AG

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 nearly stable basic indicators, Fresenius is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

VITA 34 AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VITA 34 AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VITA 34 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Fresenius and VITA 34

The main advantage of trading using opposite Fresenius and VITA 34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius position performs unexpectedly, VITA 34 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 VITA 34 will offset losses from the drop in VITA 34's long position.

The idea behind Fresenius SE Co and VITA 34 AG 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.