Correlation Between Fresenius Medical and Automatic Data

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

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

Diversification Opportunities for Fresenius Medical and Automatic Data

0.87

Correlation Coefficient

Fresenius Medical  Automatic Data

Very poor diversification

The 3 months correlation between Fresenius and Automatic is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and Fresenius Medical 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 Medical Care are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Automatic Data go up and down completely randomly.

Pair Corralation between Fresenius Medical and Automatic Data

Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 1.49 times more return on investment than Automatic Data. However, Fresenius Medical is 1.49 times more volatile than Automatic Data Processing. It trades about 0.11 of its potential returns per unit of risk. Automatic Data Processing is currently generating about 0.06 per unit of risk. If you would invest  4,131  in Fresenius Medical Care on April 24, 2025 and sell it today you would earn a total of  424.00  from holding Fresenius Medical Care or generate 10.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Fresenius Medical Care  vs.  Automatic Data Processing

Fresenius Medical Care

Risk-Adjusted Performance

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. In spite of comparatively uncertain basic indicators, Fresenius Medical may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Automatic Data Processing

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Automatic Data Processing are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Automatic Data is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fresenius Medical and Automatic Data

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

The idea behind Fresenius Medical Care and Automatic Data Processing 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..