Correlation Between Geberit AG and Temenos Group
Can any of the company-specific risk be diversified away by investing in both Geberit AG and Temenos Group 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 Temenos Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geberit AG and Temenos Group AG, you can compare the effects of market volatilities on Geberit AG and Temenos Group 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 Temenos Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geberit AG and Temenos Group.
Diversification Opportunities for Geberit AG and Temenos Group
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Geberit and Temenos is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Geberit AG and Temenos Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Temenos Group AG 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 are associated (or correlated) with Temenos Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Temenos Group AG has no effect on the direction of Geberit AG i.e., Geberit AG and Temenos Group go up and down completely randomly.
Pair Corralation between Geberit AG and Temenos Group
Assuming the 90 days trading horizon Geberit AG is expected to generate 0.99 times more return on investment than Temenos Group. However, Geberit AG is 1.01 times less risky than Temenos Group. It trades about 0.17 of its potential returns per unit of risk. Temenos Group AG is currently generating about -0.03 per unit of risk. If you would invest 49,920 in Geberit AG on November 27, 2024 and sell it today you would earn a total of 2,380 from holding Geberit AG or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geberit AG vs. Temenos Group AG
Performance |
| Timeline |
| Geberit AG |
| Temenos Group AG |
Geberit AG and Temenos Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geberit AG and Temenos Group
The main advantage of trading using opposite Geberit AG and Temenos Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geberit AG position performs unexpectedly, Temenos Group 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 Temenos Group will offset losses from the drop in Temenos Group's long position.The idea behind Geberit AG and Temenos Group AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Temenos Group vs. Logitech International SA | Temenos Group vs. Straumann Holding AG | Temenos Group vs. Geberit AG | Temenos Group vs. VAT Group AG |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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