Correlation Between Fresenius Medical and Alfa Financial

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

Diversification Opportunities for Fresenius Medical and Alfa Financial

0.9

Correlation Coefficient

Fresenius Medical  Alfa Financial

Almost no diversification

The 3 months correlation between Fresenius and Alfa is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Alfa Financial go up and down completely randomly.

Pair Corralation between Fresenius Medical and Alfa Financial

Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 1.23 times more return on investment than Alfa Financial. However, Fresenius Medical is 1.23 times more volatile than Alfa Financial Software. It trades about -0.23 of its potential returns per unit of risk. Alfa Financial Software is currently generating about -0.33 per unit of risk. If you would invest  4,949  in Fresenius Medical Care on April 17, 2025 and sell it today you would lose (337.00) from holding Fresenius Medical Care or give up 6.81% of portfolio value over 90 days.

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

Fresenius Medical Care  vs.  Alfa Financial Software

Fresenius Medical Care

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fresenius Medical Care are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fresenius Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Alfa Financial Software

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Fresenius Medical and Alfa Financial

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

The idea behind Fresenius Medical Care and Alfa Financial Software 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.