Correlation Between Fresenius and AMADEUS IT

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

Diversification Opportunities for Fresenius and AMADEUS IT

0.73

Correlation Coefficient

Fresenius  AMADEUS IT

Poor diversification

The 3 months correlation between Fresenius and AMADEUS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius SE Co and AMADEUS IT GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMADEUS IT GRP 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 AMADEUS IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMADEUS IT GRP has no effect on the direction of Fresenius i.e., Fresenius and AMADEUS IT go up and down completely randomly.

Pair Corralation between Fresenius and AMADEUS IT

Assuming the 90 days trading horizon Fresenius is expected to generate 1.03 times less return on investment than AMADEUS IT. But when comparing it to its historical volatility, Fresenius SE Co is 1.24 times less risky than AMADEUS IT. It trades about 0.09 of its potential returns per unit of risk. AMADEUS IT GRP is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  6,666  in AMADEUS IT GRP on April 20, 2025 and sell it today you would earn a total of  384.00  from holding AMADEUS IT GRP or generate 5.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Fresenius SE Co  vs.  AMADEUS IT GRP

Fresenius SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fresenius SE Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Fresenius is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

AMADEUS IT GRP

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AMADEUS IT GRP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, AMADEUS IT 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 AMADEUS IT

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

The idea behind Fresenius SE Co and AMADEUS IT GRP 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.