Correlation Between Hitachi Construction and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both Hitachi Construction and Geratherm 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 Hitachi Construction and Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Construction Machinery and Geratherm Medical AG, you can compare the effects of market volatilities on Hitachi Construction and Geratherm 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 Hitachi Construction with a short position of Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Construction and Geratherm Medical.
Diversification Opportunities for Hitachi Construction and Geratherm Medical
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hitachi and Geratherm is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Construction Machinery and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and Hitachi Construction 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 Hitachi Construction Machinery are associated (or correlated) with Geratherm Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geratherm Medical has no effect on the direction of Hitachi Construction i.e., Hitachi Construction and Geratherm Medical go up and down completely randomly.
Pair Corralation between Hitachi Construction and Geratherm Medical
Assuming the 90 days horizon Hitachi Construction Machinery is expected to under-perform the Geratherm Medical. But the stock apears to be less risky and, when comparing its historical volatility, Hitachi Construction Machinery is 2.17 times less risky than Geratherm Medical. The stock trades about -0.04 of its potential returns per unit of risk. The Geratherm Medical AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 415.00 in Geratherm Medical AG on September 3, 2024 and sell it today you would earn a total of 95.00 from holding Geratherm Medical AG or generate 22.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hitachi Construction Machinery vs. Geratherm Medical AG
Performance |
| Timeline |
| Hitachi Construction |
| Geratherm Medical |
Hitachi Construction and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Construction and Geratherm Medical
The main advantage of trading using opposite Hitachi Construction and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Construction position performs unexpectedly, Geratherm 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 Geratherm Medical will offset losses from the drop in Geratherm Medical's long position.| Hitachi Construction vs. REVO INSURANCE SPA | Hitachi Construction vs. TFS FINANCIAL | Hitachi Construction vs. Cars Inc | Hitachi Construction vs. Geely Automobile Holdings |
| Geratherm Medical vs. Stryker | Geratherm Medical vs. Insulet | Geratherm Medical vs. Superior Plus Corp | Geratherm Medical 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |