Correlation Between Advanced Medical and Gelsenwasser
Can any of the company-specific risk be diversified away by investing in both Advanced Medical and Gelsenwasser 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 Gelsenwasser 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 Gelsenwasser AG, you can compare the effects of market volatilities on Advanced Medical and Gelsenwasser 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 Gelsenwasser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Gelsenwasser.
Diversification Opportunities for Advanced Medical and Gelsenwasser
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advanced and Gelsenwasser is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Gelsenwasser AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelsenwasser AG 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 Gelsenwasser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelsenwasser AG has no effect on the direction of Advanced Medical i.e., Advanced Medical and Gelsenwasser go up and down completely randomly.
Pair Corralation between Advanced Medical and Gelsenwasser
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to under-perform the Gelsenwasser. In addition to that, Advanced Medical is 1.48 times more volatile than Gelsenwasser AG. It trades about -0.1 of its total potential returns per unit of risk. Gelsenwasser AG is currently generating about 0.05 per unit of volatility. If you would invest 49,800 in Gelsenwasser AG on October 15, 2024 and sell it today you would earn a total of 700.00 from holding Gelsenwasser AG or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Gelsenwasser AG
Performance |
| Timeline |
| Advanced Medical Sol |
| Gelsenwasser AG |
Advanced Medical and Gelsenwasser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Gelsenwasser
The main advantage of trading using opposite Advanced Medical and Gelsenwasser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical position performs unexpectedly, Gelsenwasser 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 Gelsenwasser will offset losses from the drop in Gelsenwasser's long position.| Advanced Medical vs. CODERE ONLINE LUX | Advanced Medical vs. ecotel communication ag | Advanced Medical vs. Salesforce | Advanced Medical vs. WillScot Mobile Mini |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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