Correlation Between ResMed and Gerresheimer
Can any of the company-specific risk be diversified away by investing in both ResMed and Gerresheimer 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 ResMed and Gerresheimer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ResMed Inc and Gerresheimer AG, you can compare the effects of market volatilities on ResMed and Gerresheimer 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 ResMed with a short position of Gerresheimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of ResMed and Gerresheimer.
Diversification Opportunities for ResMed and Gerresheimer
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ResMed and Gerresheimer is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ResMed Inc and Gerresheimer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gerresheimer AG and ResMed 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 ResMed Inc are associated (or correlated) with Gerresheimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gerresheimer AG has no effect on the direction of ResMed i.e., ResMed and Gerresheimer go up and down completely randomly.
Pair Corralation between ResMed and Gerresheimer
Assuming the 90 days horizon ResMed Inc is expected to generate 0.89 times more return on investment than Gerresheimer. However, ResMed Inc is 1.12 times less risky than Gerresheimer. It trades about 0.11 of its potential returns per unit of risk. Gerresheimer AG is currently generating about -0.08 per unit of risk. If you would invest 21,879 in ResMed Inc on August 30, 2024 and sell it today you would earn a total of 1,751 from holding ResMed Inc or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ResMed Inc vs. Gerresheimer AG
Performance |
| Timeline |
| ResMed Inc |
| Gerresheimer AG |
ResMed and Gerresheimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ResMed and Gerresheimer
The main advantage of trading using opposite ResMed and Gerresheimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ResMed position performs unexpectedly, Gerresheimer 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 Gerresheimer will offset losses from the drop in Gerresheimer's long position.| ResMed vs. HOYA Corporation | ResMed vs. Superior Plus Corp | ResMed vs. NMI Holdings | ResMed vs. SIVERS SEMICONDUCTORS AB |
| Gerresheimer vs. HOYA Corporation | Gerresheimer vs. Superior Plus Corp | Gerresheimer vs. NMI Holdings | Gerresheimer 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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