Correlation Between ONWARD MEDICAL and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both ONWARD MEDICAL 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 ONWARD MEDICAL and Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONWARD MEDICAL BV and Geratherm Medical AG, you can compare the effects of market volatilities on ONWARD MEDICAL 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 ONWARD MEDICAL with a short position of Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONWARD MEDICAL and Geratherm Medical.
Diversification Opportunities for ONWARD MEDICAL and Geratherm Medical
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between ONWARD and Geratherm is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ONWARD MEDICAL BV and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and ONWARD 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 ONWARD MEDICAL BV 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 ONWARD MEDICAL i.e., ONWARD MEDICAL and Geratherm Medical go up and down completely randomly.
Pair Corralation between ONWARD MEDICAL and Geratherm Medical
Assuming the 90 days horizon ONWARD MEDICAL BV is expected to generate 0.96 times more return on investment than Geratherm Medical. However, ONWARD MEDICAL BV is 1.04 times less risky than Geratherm Medical. It trades about -0.02 of its potential returns per unit of risk. Geratherm Medical AG is currently generating about -0.2 per unit of risk. If you would invest 486.00 in ONWARD MEDICAL BV on August 28, 2024 and sell it today you would lose (39.00) from holding ONWARD MEDICAL BV or give up 8.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ONWARD MEDICAL BV vs. Geratherm Medical AG
Performance |
| Timeline |
| ONWARD MEDICAL BV |
| Geratherm Medical |
ONWARD MEDICAL and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONWARD MEDICAL and Geratherm Medical
The main advantage of trading using opposite ONWARD MEDICAL and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONWARD MEDICAL 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.| ONWARD MEDICAL vs. Apyx Medical Corp | ONWARD MEDICAL vs. Geratherm Medical AG | ONWARD MEDICAL vs. MCEWEN MINING INC | ONWARD MEDICAL vs. ADRIATIC METALS LS 013355 |
| Geratherm Medical vs. Superior Plus Corp | Geratherm Medical vs. NMI Holdings | Geratherm Medical vs. Origin Agritech | Geratherm Medical vs. SIVERS SEMICONDUCTORS AB |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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