Correlation Between Geberit AG and Kuehne Nagel
Can any of the company-specific risk be diversified away by investing in both Geberit AG and Kuehne Nagel 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 Geberit AG and Kuehne Nagel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geberit AG ADR and Kuehne Nagel International, you can compare the effects of market volatilities on Geberit AG and Kuehne Nagel 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 Geberit AG with a short position of Kuehne Nagel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geberit AG and Kuehne Nagel.
Diversification Opportunities for Geberit AG and Kuehne Nagel
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Geberit and Kuehne is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Geberit AG ADR and Kuehne Nagel International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuehne Nagel Interna and Geberit AG 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 Geberit AG ADR are associated (or correlated) with Kuehne Nagel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuehne Nagel Interna has no effect on the direction of Geberit AG i.e., Geberit AG and Kuehne Nagel go up and down completely randomly.
Pair Corralation between Geberit AG and Kuehne Nagel
Assuming the 90 days horizon Geberit AG ADR is expected to generate 0.97 times more return on investment than Kuehne Nagel. However, Geberit AG ADR is 1.03 times less risky than Kuehne Nagel. It trades about 0.02 of its potential returns per unit of risk. Kuehne Nagel International is currently generating about -0.04 per unit of risk. If you would invest 5,392 in Geberit AG ADR on August 26, 2024 and sell it today you would earn a total of 472.00 from holding Geberit AG ADR or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geberit AG ADR vs. Kuehne Nagel International
Performance |
| Timeline |
| Geberit AG ADR |
| Kuehne Nagel Interna |
Geberit AG and Kuehne Nagel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geberit AG and Kuehne Nagel
The main advantage of trading using opposite Geberit AG and Kuehne Nagel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geberit AG position performs unexpectedly, Kuehne Nagel 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 Kuehne Nagel will offset losses from the drop in Kuehne Nagel's long position.| Geberit AG vs. DSV Panalpina AS | Geberit AG vs. SGS SA | Geberit AG vs. Givaudan SA ADR | Geberit AG vs. Kuehne Nagel International |
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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 Stocks Directory module to find actively traded stocks across global markets.
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