Correlation Between Gerresheimer and AfriTin Mining
Can any of the company-specific risk be diversified away by investing in both Gerresheimer and AfriTin Mining 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 Gerresheimer and AfriTin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gerresheimer AG and AfriTin Mining, you can compare the effects of market volatilities on Gerresheimer and AfriTin Mining 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 Gerresheimer with a short position of AfriTin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gerresheimer and AfriTin Mining.
Diversification Opportunities for Gerresheimer and AfriTin Mining
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gerresheimer and AfriTin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gerresheimer AG and AfriTin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfriTin Mining and Gerresheimer 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 Gerresheimer AG are associated (or correlated) with AfriTin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfriTin Mining has no effect on the direction of Gerresheimer i.e., Gerresheimer and AfriTin Mining go up and down completely randomly.
Pair Corralation between Gerresheimer and AfriTin Mining
Assuming the 90 days trading horizon Gerresheimer AG is expected to under-perform the AfriTin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Gerresheimer AG is 1.57 times less risky than AfriTin Mining. The stock trades about -0.18 of its potential returns per unit of risk. The AfriTin Mining is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 335.00 in AfriTin Mining on September 3, 2024 and sell it today you would lose (60.00) from holding AfriTin Mining or give up 17.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gerresheimer AG vs. AfriTin Mining
Performance |
| Timeline |
| Gerresheimer AG |
| AfriTin Mining |
Gerresheimer and AfriTin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gerresheimer and AfriTin Mining
The main advantage of trading using opposite Gerresheimer and AfriTin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gerresheimer position performs unexpectedly, AfriTin Mining 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 AfriTin Mining will offset losses from the drop in AfriTin Mining's long position.| Gerresheimer vs. AfriTin Mining | Gerresheimer vs. Invesco Physical Silver | Gerresheimer vs. Lundin Mining Corp | Gerresheimer vs. Caledonia Mining |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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