Correlation Between Fresenius Medical and ICON PLC
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and ICON 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 ICON 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 ICON PLC, you can compare the effects of market volatilities on Fresenius Medical and ICON 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 ICON PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and ICON PLC.
Diversification Opportunities for Fresenius Medical and ICON PLC
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fresenius and ICON is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and ICON PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICON 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 ICON PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICON PLC has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and ICON PLC go up and down completely randomly.
Pair Corralation between Fresenius Medical and ICON PLC
Considering the 90-day investment horizon Fresenius Medical Care is expected to generate 0.62 times more return on investment than ICON PLC. However, Fresenius Medical Care is 1.62 times less risky than ICON PLC. It trades about -0.05 of its potential returns per unit of risk. ICON PLC is currently generating about -0.04 per unit of risk. If you would invest 2,484 in Fresenius Medical Care on August 16, 2025 and sell it today you would lose (145.00) from holding Fresenius Medical Care or give up 5.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. ICON PLC
Performance |
| Timeline |
| Fresenius Medical Care |
| ICON PLC |
Fresenius Medical and ICON PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and ICON PLC
The main advantage of trading using opposite Fresenius Medical and ICON PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, ICON 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 ICON PLC will offset losses from the drop in ICON PLC's long position.| Fresenius Medical vs. Universal Health Services | Fresenius Medical vs. Tenet Healthcare | Fresenius Medical vs. Encompass Health Corp | Fresenius Medical vs. DaVita HealthCare Partners |
| ICON PLC vs. EXACT Sciences | ICON PLC vs. Guardant Health | ICON PLC vs. Medpace Holdings | ICON PLC vs. Qiagen NV |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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