Correlation Between Geratherm Medical and M/I Homes
Can any of the company-specific risk be diversified away by investing in both Geratherm Medical and M/I Homes 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 Geratherm Medical and M/I Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geratherm Medical AG and MI Homes, you can compare the effects of market volatilities on Geratherm Medical and M/I Homes 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 Geratherm Medical with a short position of M/I Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geratherm Medical and M/I Homes.
Diversification Opportunities for Geratherm Medical and M/I Homes
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Geratherm and M/I is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Geratherm Medical AG and MI Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M/I Homes and Geratherm Medical 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 Geratherm Medical AG are associated (or correlated) with M/I Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M/I Homes has no effect on the direction of Geratherm Medical i.e., Geratherm Medical and M/I Homes go up and down completely randomly.
Pair Corralation between Geratherm Medical and M/I Homes
Assuming the 90 days trading horizon Geratherm Medical AG is expected to generate 2.77 times more return on investment than M/I Homes. However, Geratherm Medical is 2.77 times more volatile than MI Homes. It trades about 0.31 of its potential returns per unit of risk. MI Homes is currently generating about 0.2 per unit of risk. If you would invest 322.00 in Geratherm Medical AG on September 1, 2024 and sell it today you would earn a total of 188.00 from holding Geratherm Medical AG or generate 58.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geratherm Medical AG vs. MI Homes
Performance |
| Timeline |
| Geratherm Medical |
| M/I Homes |
Geratherm Medical and M/I Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geratherm Medical and M/I Homes
The main advantage of trading using opposite Geratherm Medical and M/I Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geratherm Medical position performs unexpectedly, M/I Homes 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 M/I Homes will offset losses from the drop in M/I Homes' long position.| Geratherm Medical vs. Computer And Technologies | Geratherm Medical vs. SMA Solar Technology | Geratherm Medical vs. FANDIFI TECHNOLOGY P | Geratherm Medical vs. Vishay Intertechnology |
| M/I Homes vs. Verizon Communications | M/I Homes vs. Allianz SE | M/I Homes vs. Onxeo SA | M/I Homes vs. Sixt SE |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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