Correlation Between Geratherm Medical and MeVis Medical
Can any of the company-specific risk be diversified away by investing in both Geratherm Medical and MeVis 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 MeVis 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 MeVis Medical Solutions, you can compare the effects of market volatilities on Geratherm Medical and MeVis 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 MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geratherm Medical and MeVis Medical.
Diversification Opportunities for Geratherm Medical and MeVis Medical
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Geratherm and MeVis is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Geratherm Medical AG and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions 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 MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of Geratherm Medical i.e., Geratherm Medical and MeVis Medical go up and down completely randomly.
Pair Corralation between Geratherm Medical and MeVis Medical
Assuming the 90 days trading horizon Geratherm Medical AG is expected to under-perform the MeVis Medical. In addition to that, Geratherm Medical is 2.59 times more volatile than MeVis Medical Solutions. It trades about -0.02 of its total potential returns per unit of risk. MeVis Medical Solutions is currently generating about -0.04 per unit of volatility. If you would invest 3,110 in MeVis Medical Solutions on August 28, 2024 and sell it today you would lose (710.00) from holding MeVis Medical Solutions or give up 22.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.42% |
| Values | Daily Returns |
Geratherm Medical AG vs. MeVis Medical Solutions
Performance |
| Timeline |
| Geratherm Medical |
| MeVis Medical Solutions |
Geratherm Medical and MeVis Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geratherm Medical and MeVis Medical
The main advantage of trading using opposite Geratherm Medical and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geratherm Medical position performs unexpectedly, MeVis 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 MeVis Medical will offset losses from the drop in MeVis Medical's long position.| Geratherm Medical vs. Superior Plus Corp | Geratherm Medical vs. NMI Holdings | Geratherm Medical vs. Origin Agritech | Geratherm Medical vs. SIVERS SEMICONDUCTORS AB |
| MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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