Correlation Between Fresenius Medical and STERIS Plc

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

Diversification Opportunities for Fresenius Medical and STERIS Plc

0.81

Correlation Coefficient

Fresenius Medical  STERIS Plc

Very poor diversification

The 3 months correlation between Fresenius and STERIS is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and STERIS plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STERIS plc 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 STERIS Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STERIS plc has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and STERIS Plc go up and down completely randomly.

Pair Corralation between Fresenius Medical and STERIS Plc

Considering the 90-day investment horizon Fresenius Medical is expected to generate 1.2 times less return on investment than STERIS Plc. In addition to that, Fresenius Medical is 1.16 times more volatile than STERIS plc. It trades about 0.02 of its total potential returns per unit of risk. STERIS plc is currently generating about 0.02 per unit of volatility. If you would invest  22,377  in STERIS plc on May 5, 2025 and sell it today you would earn a total of  310.00  from holding STERIS plc or generate 1.39% return on investment over 90 days.

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

Fresenius Medical Care  vs.  STERIS plc

Fresenius Medical Care

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fresenius Medical Care are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

STERIS plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in STERIS plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, STERIS Plc is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fresenius Medical and STERIS Plc

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

The idea behind Fresenius Medical Care and STERIS plc 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.