Correlation Between Geratherm Medical and ITALIAN WINE
Can any of the company-specific risk be diversified away by investing in both Geratherm Medical and ITALIAN 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 ITALIAN 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 ITALIAN WINE BRANDS, you can compare the effects of market volatilities on Geratherm Medical and ITALIAN 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 ITALIAN WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geratherm Medical and ITALIAN WINE.
Diversification Opportunities for Geratherm Medical and ITALIAN WINE
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Geratherm and ITALIAN is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Geratherm Medical AG and ITALIAN WINE BRANDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITALIAN WINE BRANDS 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 ITALIAN WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITALIAN WINE BRANDS has no effect on the direction of Geratherm Medical i.e., Geratherm Medical and ITALIAN WINE go up and down completely randomly.
Pair Corralation between Geratherm Medical and ITALIAN WINE
Assuming the 90 days trading horizon Geratherm Medical AG is expected to under-perform the ITALIAN WINE. In addition to that, Geratherm Medical is 1.73 times more volatile than ITALIAN WINE BRANDS. It trades about -0.07 of its total potential returns per unit of risk. ITALIAN WINE BRANDS is currently generating about 0.08 per unit of volatility. If you would invest 1,605 in ITALIAN WINE BRANDS on August 27, 2024 and sell it today you would earn a total of 635.00 from holding ITALIAN WINE BRANDS or generate 39.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geratherm Medical AG vs. ITALIAN WINE BRANDS
Performance |
| Timeline |
| Geratherm Medical |
| ITALIAN WINE BRANDS |
Geratherm Medical and ITALIAN WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geratherm Medical and ITALIAN WINE
The main advantage of trading using opposite Geratherm Medical and ITALIAN WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geratherm Medical position performs unexpectedly, ITALIAN 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 ITALIAN WINE will offset losses from the drop in ITALIAN WINE'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 |
| ITALIAN WINE vs. Superior Plus Corp | ITALIAN WINE vs. NMI Holdings | ITALIAN WINE vs. Origin Agritech | ITALIAN WINE vs. SIVERS SEMICONDUCTORS AB |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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