Correlation Between AIR PRODCHEMICALS and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Geratherm Medical AG, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Geratherm Medical.
Diversification Opportunities for AIR PRODCHEMICALS and Geratherm Medical
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AIR and Geratherm is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Geratherm Medical go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Geratherm Medical
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.52 times more return on investment than Geratherm Medical. However, AIR PRODCHEMICALS is 1.93 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 -0.03 per unit of risk. If you would invest 28,464 in AIR PRODCHEMICALS on August 24, 2024 and sell it today you would earn a total of 2,886 from holding AIR PRODCHEMICALS or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.43% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. Geratherm Medical AG
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Geratherm Medical |
AIR PRODCHEMICALS and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Geratherm Medical
The main advantage of trading using opposite AIR PRODCHEMICALS and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc |
| Geratherm Medical vs. Align Technology | Geratherm Medical vs. Superior Plus Corp | Geratherm Medical vs. NMI Holdings | Geratherm Medical vs. Origin Agritech |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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