Correlation Between Advanced Medical and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both Advanced 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 Advanced 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 Advanced Medical Solutions and Geratherm Medical AG, you can compare the effects of market volatilities on Advanced 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 Advanced Medical with a short position of Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Geratherm Medical.
Diversification Opportunities for Advanced Medical and Geratherm Medical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advanced and Geratherm is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and Advanced 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 Advanced Medical Solutions 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 Advanced Medical i.e., Advanced Medical and Geratherm Medical go up and down completely randomly.
Pair Corralation between Advanced Medical and Geratherm Medical
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to generate 0.57 times more return on investment than Geratherm Medical. However, Advanced Medical Solutions is 1.74 times less risky than Geratherm Medical. It trades about 0.09 of its potential returns per unit of risk. Geratherm Medical AG is currently generating about 0.05 per unit of risk. If you would invest 226.00 in Advanced Medical Solutions on August 29, 2024 and sell it today you would earn a total of 14.00 from holding Advanced Medical Solutions or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Geratherm Medical AG
Performance |
| Timeline |
| Advanced Medical Sol |
| Geratherm Medical |
Advanced Medical and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Geratherm Medical
The main advantage of trading using opposite Advanced Medical and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced 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.| Advanced Medical vs. Autohome ADR | Advanced Medical vs. FORMPIPE SOFTWARE AB | Advanced Medical vs. Neinor Homes SA | Advanced Medical vs. Beazer Homes USA |
| Geratherm Medical vs. Abbott Laboratories | Geratherm Medical vs. Medtronic PLC | Geratherm Medical vs. Stryker | Geratherm Medical vs. Boston Scientific |
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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