Correlation Between Geratherm Medical and Computer
Can any of the company-specific risk be diversified away by investing in both Geratherm Medical and Computer 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 Computer 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 Computer And Technologies, you can compare the effects of market volatilities on Geratherm Medical and Computer 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 Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geratherm Medical and Computer.
Diversification Opportunities for Geratherm Medical and Computer
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Geratherm and Computer is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Geratherm Medical AG and Computer And Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer And Technologies 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 Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer And Technologies has no effect on the direction of Geratherm Medical i.e., Geratherm Medical and Computer go up and down completely randomly.
Pair Corralation between Geratherm Medical and Computer
Assuming the 90 days trading horizon Geratherm Medical AG is expected to generate 3.55 times more return on investment than Computer. However, Geratherm Medical is 3.55 times more volatile than Computer And Technologies. It trades about 0.3 of its potential returns per unit of risk. Computer And Technologies is currently generating about -0.22 per unit of risk. If you would invest 332.00 in Geratherm Medical AG on September 3, 2024 and sell it today you would earn a total of 178.00 from holding Geratherm Medical AG or generate 53.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geratherm Medical AG vs. Computer And Technologies
Performance |
| Timeline |
| Geratherm Medical |
| Computer And Technologies |
Geratherm Medical and Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geratherm Medical and Computer
The main advantage of trading using opposite Geratherm Medical and Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geratherm Medical position performs unexpectedly, Computer 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 Computer will offset losses from the drop in Computer's long position.| Geratherm Medical vs. Stryker | Geratherm Medical vs. Insulet | Geratherm Medical vs. Superior Plus Corp | Geratherm Medical vs. NMI Holdings |
| Computer vs. International Business Machines | Computer vs. FUJITSU LTD ADR | Computer vs. Superior Plus Corp | Computer 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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