Correlation Between Chongqing Machinery and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both Chongqing Machinery 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 Chongqing Machinery and Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chongqing Machinery Electric and Geratherm Medical AG, you can compare the effects of market volatilities on Chongqing Machinery 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 Chongqing Machinery with a short position of Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Machinery and Geratherm Medical.
Diversification Opportunities for Chongqing Machinery and Geratherm Medical
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chongqing and Geratherm is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Machinery Electric and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and Chongqing Machinery 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 Chongqing Machinery Electric 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 Chongqing Machinery i.e., Chongqing Machinery and Geratherm Medical go up and down completely randomly.
Pair Corralation between Chongqing Machinery and Geratherm Medical
Assuming the 90 days horizon Chongqing Machinery Electric is expected to generate 1.05 times more return on investment than Geratherm Medical. However, Chongqing Machinery is 1.05 times more volatile than Geratherm Medical AG. It trades about 0.09 of its potential returns per unit of risk. Geratherm Medical AG is currently generating about 0.06 per unit of risk. If you would invest 4.63 in Chongqing Machinery Electric on September 3, 2024 and sell it today you would earn a total of 2.72 from holding Chongqing Machinery Electric or generate 58.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Machinery Electric vs. Geratherm Medical AG
Performance |
| Timeline |
| Chongqing Machinery |
| Geratherm Medical |
Chongqing Machinery and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Machinery and Geratherm Medical
The main advantage of trading using opposite Chongqing Machinery and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Machinery 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.| Chongqing Machinery vs. Geely Automobile Holdings | Chongqing Machinery vs. TOWNSQUARE MEDIA INC | Chongqing Machinery vs. JD SPORTS FASH | Chongqing Machinery vs. XLMedia PLC |
| Geratherm Medical vs. Stryker | Geratherm Medical vs. Insulet | Geratherm Medical vs. Superior Plus Corp | Geratherm Medical vs. NMI Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |