Correlation Between Berkeley Energia and Gerresheimer
Can any of the company-specific risk be diversified away by investing in both Berkeley Energia and Gerresheimer 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 Berkeley Energia and Gerresheimer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkeley Energia Limited and Gerresheimer AG, you can compare the effects of market volatilities on Berkeley Energia and Gerresheimer 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 Berkeley Energia with a short position of Gerresheimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkeley Energia and Gerresheimer.
Diversification Opportunities for Berkeley Energia and Gerresheimer
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkeley and Gerresheimer is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Berkeley Energia Limited and Gerresheimer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gerresheimer AG and Berkeley Energia 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 Berkeley Energia Limited are associated (or correlated) with Gerresheimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gerresheimer AG has no effect on the direction of Berkeley Energia i.e., Berkeley Energia and Gerresheimer go up and down completely randomly.
Pair Corralation between Berkeley Energia and Gerresheimer
Assuming the 90 days horizon Berkeley Energia Limited is expected to generate 2.1 times more return on investment than Gerresheimer. However, Berkeley Energia is 2.1 times more volatile than Gerresheimer AG. It trades about -0.04 of its potential returns per unit of risk. Gerresheimer AG is currently generating about -0.11 per unit of risk. If you would invest 21.00 in Berkeley Energia Limited on September 2, 2024 and sell it today you would lose (1.00) from holding Berkeley Energia Limited or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkeley Energia Limited vs. Gerresheimer AG
Performance |
| Timeline |
| Berkeley Energia |
| Gerresheimer AG |
Berkeley Energia and Gerresheimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkeley Energia and Gerresheimer
The main advantage of trading using opposite Berkeley Energia and Gerresheimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkeley Energia position performs unexpectedly, Gerresheimer 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 Gerresheimer will offset losses from the drop in Gerresheimer's long position.| Berkeley Energia vs. BHP Group Limited | Berkeley Energia vs. Rio Tinto Group | Berkeley Energia vs. Rio Tinto Group | Berkeley Energia vs. Vale SA |
| Gerresheimer vs. ESSILORLUXOTTICA 12ON | Gerresheimer vs. Intuitive Surgical | Gerresheimer vs. EssilorLuxottica Socit anonyme | Gerresheimer vs. HOYA Corporation |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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