Correlation Between MEDICAL FACILITIES and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES and Geratherm Medical 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 MEDICAL FACILITIES and Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICAL FACILITIES NEW and Geratherm Medical AG, you can compare the effects of market volatilities on MEDICAL FACILITIES and Geratherm Medical 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 MEDICAL FACILITIES with a short position of Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and Geratherm Medical.
Diversification Opportunities for MEDICAL FACILITIES and Geratherm Medical
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MEDICAL and Geratherm is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW are associated (or correlated) with Geratherm Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geratherm Medical has no effect on the direction of MEDICAL FACILITIES i.e., MEDICAL FACILITIES and Geratherm Medical go up and down completely randomly.
Pair Corralation between MEDICAL FACILITIES and Geratherm Medical
Assuming the 90 days horizon MEDICAL FACILITIES is expected to generate 4.52 times less return on investment than Geratherm Medical. But when comparing it to its historical volatility, MEDICAL FACILITIES NEW is 3.67 times less risky than Geratherm Medical. It trades about 0.23 of its potential returns per unit of risk. Geratherm Medical AG is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 326.00 in Geratherm Medical AG on August 31, 2024 and sell it today you would earn a total of 204.00 from holding Geratherm Medical AG or generate 62.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDICAL FACILITIES NEW vs. Geratherm Medical AG
Performance |
| Timeline |
| MEDICAL FACILITIES NEW |
| Geratherm Medical |
MEDICAL FACILITIES and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICAL FACILITIES and Geratherm Medical
The main advantage of trading using opposite MEDICAL FACILITIES and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES position performs unexpectedly, Geratherm Medical 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 Geratherm Medical will offset losses from the drop in Geratherm Medical's long position.| MEDICAL FACILITIES vs. LEGACY IRON ORE | MEDICAL FACILITIES vs. BLUESCOPE STEEL | MEDICAL FACILITIES vs. COSMOSTEEL HLDGS | MEDICAL FACILITIES vs. BlueScope Steel Limited |
| Geratherm Medical vs. Stryker | Geratherm Medical vs. Align Technology | Geratherm Medical vs. Insulet | Geratherm Medical vs. Superior Plus Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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