Correlation Between Batm Advanced and Gerresheimer
Can any of the company-specific risk be diversified away by investing in both Batm Advanced 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 Batm Advanced and Gerresheimer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and Gerresheimer AG, you can compare the effects of market volatilities on Batm Advanced 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 Batm Advanced with a short position of Gerresheimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Gerresheimer.
Diversification Opportunities for Batm Advanced and Gerresheimer
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Batm and Gerresheimer is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Gerresheimer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gerresheimer AG and Batm Advanced 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 Batm Advanced Communications 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 Batm Advanced i.e., Batm Advanced and Gerresheimer go up and down completely randomly.
Pair Corralation between Batm Advanced and Gerresheimer
Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Gerresheimer. In addition to that, Batm Advanced is 1.18 times more volatile than Gerresheimer AG. It trades about -0.01 of its total potential returns per unit of risk. Gerresheimer AG is currently generating about 0.03 per unit of volatility. If you would invest 6,082 in Gerresheimer AG on September 2, 2024 and sell it today you would earn a total of 1,378 from holding Gerresheimer AG or generate 22.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Gerresheimer AG
Performance |
| Timeline |
| Batm Advanced Commun |
| Gerresheimer AG |
Batm Advanced and Gerresheimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Gerresheimer
The main advantage of trading using opposite Batm Advanced and Gerresheimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced 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.| Batm Advanced vs. Alaska Air Group | Batm Advanced vs. Delta Air Lines | Batm Advanced vs. Silvercorp Metals | Batm Advanced vs. Greenroc Mining PLC |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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