Correlation Between Fresenius Medical and K Bro

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

Diversification Opportunities for Fresenius Medical and K Bro

-0.32

Correlation Coefficient

Fresenius Medical  K Bro

Very good diversification

The 3 months correlation between Fresenius and KBRLF is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and K Bro Linen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Bro Linen 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 K Bro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Bro Linen has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and K Bro go up and down completely randomly.

Pair Corralation between Fresenius Medical and K Bro

Considering the 90-day investment horizon Fresenius Medical Care is expected to under-perform the K Bro. But the stock apears to be less risky and, when comparing its historical volatility, Fresenius Medical Care is 1.03 times less risky than K Bro. The stock trades about -0.04 of its potential returns per unit of risk. The K Bro Linen is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,520  in K Bro Linen on July 4, 2025 and sell it today you would earn a total of  92.00  from holding K Bro Linen or generate 3.65% return on investment over 90 days.

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

Fresenius Medical Care  vs.  K Bro Linen

Fresenius Medical Care

Risk-Adjusted Performance

Weakest

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

K Bro Linen

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in K Bro Linen are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, K Bro is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Fresenius Medical and K Bro

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

The idea behind Fresenius Medical Care and K Bro Linen 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.