Correlation Between Becton Dickinson and Gerresheimer
Can any of the company-specific risk be diversified away by investing in both Becton Dickinson 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 Becton Dickinson and Gerresheimer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Becton Dickinson and and Gerresheimer AG, you can compare the effects of market volatilities on Becton Dickinson 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 Becton Dickinson with a short position of Gerresheimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Becton Dickinson and Gerresheimer.
Diversification Opportunities for Becton Dickinson and Gerresheimer
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Becton and Gerresheimer is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Becton Dickinson and and Gerresheimer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gerresheimer AG and Becton Dickinson 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 Becton Dickinson and 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 Becton Dickinson i.e., Becton Dickinson and Gerresheimer go up and down completely randomly.
Pair Corralation between Becton Dickinson and Gerresheimer
Assuming the 90 days horizon Becton Dickinson and is expected to under-perform the Gerresheimer. But the stock apears to be less risky and, when comparing its historical volatility, Becton Dickinson and is 1.76 times less risky than Gerresheimer. The stock trades about 0.0 of its potential returns per unit of risk. The Gerresheimer AG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,194 in Gerresheimer AG on August 30, 2024 and sell it today you would earn a total of 1,201 from holding Gerresheimer AG or generate 19.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Becton Dickinson and vs. Gerresheimer AG
Performance |
| Timeline |
| Becton Dickinson |
| Gerresheimer AG |
Becton Dickinson and Gerresheimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Becton Dickinson and Gerresheimer
The main advantage of trading using opposite Becton Dickinson and Gerresheimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Becton Dickinson 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.| Becton Dickinson vs. HOYA Corporation | Becton Dickinson vs. Superior Plus Corp | Becton Dickinson vs. NMI Holdings | Becton Dickinson vs. SIVERS SEMICONDUCTORS AB |
| Gerresheimer vs. HOYA Corporation | Gerresheimer vs. Superior Plus Corp | Gerresheimer vs. NMI Holdings | Gerresheimer 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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