Correlation Between ITALIAN WINE and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE 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 ITALIAN WINE and Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and Geratherm Medical AG, you can compare the effects of market volatilities on ITALIAN WINE 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 ITALIAN WINE with a short position of Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and Geratherm Medical.
Diversification Opportunities for ITALIAN WINE and Geratherm Medical
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ITALIAN and Geratherm is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and ITALIAN WINE 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 ITALIAN WINE BRANDS 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 ITALIAN WINE i.e., ITALIAN WINE and Geratherm Medical go up and down completely randomly.
Pair Corralation between ITALIAN WINE and Geratherm Medical
Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to under-perform the Geratherm Medical. But the stock apears to be less risky and, when comparing its historical volatility, ITALIAN WINE BRANDS is 1.8 times less risky than Geratherm Medical. The stock trades about 0.0 of its potential returns per unit of risk. The Geratherm Medical AG is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 566.00 in Geratherm Medical AG on August 30, 2024 and sell it today you would lose (36.00) from holding Geratherm Medical AG or give up 6.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.43% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. Geratherm Medical AG
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| Geratherm Medical |
ITALIAN WINE and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and Geratherm Medical
The main advantage of trading using opposite ITALIAN WINE and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE 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.The idea behind ITALIAN WINE BRANDS and Geratherm Medical AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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