Correlation Between Geratherm Medical and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both Geratherm Medical and Advanced 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 Geratherm Medical and Advanced Medical 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 Advanced Medical Solutions, you can compare the effects of market volatilities on Geratherm Medical and Advanced 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 Geratherm Medical with a short position of Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geratherm Medical and Advanced Medical.
Diversification Opportunities for Geratherm Medical and Advanced Medical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Geratherm and Advanced is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Geratherm Medical AG and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of Geratherm Medical i.e., Geratherm Medical and Advanced Medical go up and down completely randomly.
Pair Corralation between Geratherm Medical and Advanced Medical
Assuming the 90 days trading horizon Geratherm Medical AG is expected to generate 2.46 times more return on investment than Advanced Medical. However, Geratherm Medical is 2.46 times more volatile than Advanced Medical Solutions. It trades about 0.31 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about -0.03 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geratherm Medical AG vs. Advanced Medical Solutions
Performance |
| Timeline |
| Geratherm Medical |
| Advanced Medical Sol |
Geratherm Medical and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geratherm Medical and Advanced Medical
The main advantage of trading using opposite Geratherm Medical and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geratherm Medical position performs unexpectedly, Advanced 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 Advanced Medical will offset losses from the drop in Advanced Medical's 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 |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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