Correlation Between ETFS Coffee and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee 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 ETFS Coffee and Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS Coffee ETC and Geratherm Medical AG, you can compare the effects of market volatilities on ETFS Coffee 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 ETFS Coffee with a short position of Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and Geratherm Medical.
Diversification Opportunities for ETFS Coffee and Geratherm Medical
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ETFS and Geratherm is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and ETFS Coffee 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 ETFS Coffee ETC 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 ETFS Coffee i.e., ETFS Coffee and Geratherm Medical go up and down completely randomly.
Pair Corralation between ETFS Coffee and Geratherm Medical
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 12.55 times more return on investment than Geratherm Medical. However, ETFS Coffee is 12.55 times more volatile than Geratherm Medical AG. It trades about 0.05 of its potential returns per unit of risk. Geratherm Medical AG is currently generating about 0.02 per unit of risk. If you would invest 92.00 in ETFS Coffee ETC on August 31, 2024 and sell it today you would earn a total of 5,086 from holding ETFS Coffee ETC or generate 5528.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.54% |
| Values | Daily Returns |
ETFS Coffee ETC vs. Geratherm Medical AG
Performance |
| Timeline |
| ETFS Coffee ETC |
| Geratherm Medical |
ETFS Coffee and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and Geratherm Medical
The main advantage of trading using opposite ETFS Coffee and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee 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.| ETFS Coffee vs. TELES Informationstechnologien AG | ETFS Coffee vs. National Storage Affiliates | ETFS Coffee vs. INFORMATION SVC GRP | ETFS Coffee vs. Datadog |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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