Correlation Between Geratherm Medical and VIVA WINE
Can any of the company-specific risk be diversified away by investing in both Geratherm Medical and VIVA WINE 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 VIVA WINE 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 VIVA WINE GROUP, you can compare the effects of market volatilities on Geratherm Medical and VIVA WINE 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 VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geratherm Medical and VIVA WINE.
Diversification Opportunities for Geratherm Medical and VIVA WINE
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Geratherm and VIVA is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Geratherm Medical AG and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE GROUP 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 VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of Geratherm Medical i.e., Geratherm Medical and VIVA WINE go up and down completely randomly.
Pair Corralation between Geratherm Medical and VIVA WINE
Assuming the 90 days trading horizon Geratherm Medical AG is expected to generate 5.87 times more return on investment than VIVA WINE. However, Geratherm Medical is 5.87 times more volatile than VIVA WINE GROUP. It trades about 0.21 of its potential returns per unit of risk. VIVA WINE GROUP is currently generating about -0.01 per unit of risk. If you would invest 316.00 in Geratherm Medical AG on August 30, 2024 and sell it today you would earn a total of 122.00 from holding Geratherm Medical AG or generate 38.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Geratherm Medical AG vs. VIVA WINE GROUP
Performance |
| Timeline |
| Geratherm Medical |
| VIVA WINE GROUP |
Geratherm Medical and VIVA WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geratherm Medical and VIVA WINE
The main advantage of trading using opposite Geratherm Medical and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geratherm Medical position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE's long position.| Geratherm Medical vs. Medtronic PLC | Geratherm Medical vs. Stryker | Geratherm Medical vs. Boston Scientific | Geratherm Medical vs. Edwards Lifesciences |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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