Correlation Between SAFETY MEDICAL and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both SAFETY MEDICAL 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 SAFETY MEDICAL and Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAFETY MEDICAL PROD and Geratherm Medical AG, you can compare the effects of market volatilities on SAFETY MEDICAL 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 SAFETY MEDICAL with a short position of Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAFETY MEDICAL and Geratherm Medical.
Diversification Opportunities for SAFETY MEDICAL and Geratherm Medical
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAFETY and Geratherm is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SAFETY MEDICAL PROD and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and SAFETY MEDICAL 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 SAFETY MEDICAL PROD 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 SAFETY MEDICAL i.e., SAFETY MEDICAL and Geratherm Medical go up and down completely randomly.
Pair Corralation between SAFETY MEDICAL and Geratherm Medical
Assuming the 90 days trading horizon SAFETY MEDICAL PROD is expected to generate 1.04 times more return on investment than Geratherm Medical. However, SAFETY MEDICAL is 1.04 times more volatile than Geratherm Medical AG. It trades about -0.01 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 35.00 in SAFETY MEDICAL PROD on August 28, 2024 and sell it today you would lose (13.00) from holding SAFETY MEDICAL PROD or give up 37.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.42% |
| Values | Daily Returns |
SAFETY MEDICAL PROD vs. Geratherm Medical AG
Performance |
| Timeline |
| SAFETY MEDICAL PROD |
| Geratherm Medical |
SAFETY MEDICAL and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAFETY MEDICAL and Geratherm Medical
The main advantage of trading using opposite SAFETY MEDICAL and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAFETY MEDICAL 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.| SAFETY MEDICAL vs. PARKEN Sport Entertainment | SAFETY MEDICAL vs. REINET INVESTMENTS SCA | SAFETY MEDICAL vs. HK Electric Investments | SAFETY MEDICAL vs. Aluminum of |
| Geratherm Medical vs. Superior Plus Corp | Geratherm Medical vs. NMI Holdings | Geratherm Medical vs. Origin Agritech | Geratherm Medical 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |