Correlation Between NYSE Composite and Geberit AG
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Geberit AG 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 NYSE Composite and Geberit AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Geberit AG ADR, you can compare the effects of market volatilities on NYSE Composite and Geberit AG 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 NYSE Composite with a short position of Geberit AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Geberit AG.
Diversification Opportunities for NYSE Composite and Geberit AG
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Geberit is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Geberit AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geberit AG ADR and NYSE Composite 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 NYSE Composite are associated (or correlated) with Geberit AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geberit AG ADR has no effect on the direction of NYSE Composite i.e., NYSE Composite and Geberit AG go up and down completely randomly.
Pair Corralation between NYSE Composite and Geberit AG
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.57 times more return on investment than Geberit AG. However, NYSE Composite is 1.77 times less risky than Geberit AG. It trades about 0.14 of its potential returns per unit of risk. Geberit AG ADR is currently generating about -0.01 per unit of risk. If you would invest 1,800,696 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 226,508 from holding NYSE Composite or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
NYSE Composite vs. Geberit AG ADR
Performance |
| Timeline |
NYSE Composite and Geberit AG Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Geberit AG ADR
Pair trading matchups for Geberit AG
Pair Trading with NYSE Composite and Geberit AG
The main advantage of trading using opposite NYSE Composite and Geberit AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Geberit AG 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 Geberit AG will offset losses from the drop in Geberit AG's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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