Correlation Between MEDICAL FACILITIES and Geberit AG

Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES 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 MEDICAL FACILITIES and Geberit AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MEDICAL FACILITIES NEW and Geberit AG, you can compare the effects of market volatilities on MEDICAL FACILITIES 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 MEDICAL FACILITIES with a short position of Geberit AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and Geberit AG.

Diversification Opportunities for MEDICAL FACILITIES and Geberit AG

-0.19

Correlation Coefficient

MEDICAL FACILITIES  Geberit AG

Good diversification

The 3 months correlation between MEDICAL and Geberit is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and Geberit AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geberit AG and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW 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 has no effect on the direction of MEDICAL FACILITIES i.e., MEDICAL FACILITIES and Geberit AG go up and down completely randomly.

Pair Corralation between MEDICAL FACILITIES and Geberit AG

Assuming the 90 days horizon MEDICAL FACILITIES is expected to generate 15.82 times less return on investment than Geberit AG. In addition to that, MEDICAL FACILITIES is 1.48 times more volatile than Geberit AG. It trades about 0.0 of its total potential returns per unit of risk. Geberit AG is currently generating about 0.07 per unit of volatility. If you would invest  5,400  in Geberit AG on December 22, 2024 and sell it today you would earn a total of  500.00  from holding Geberit AG or generate 9.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

MEDICAL FACILITIES NEW  vs.  Geberit AG

MEDICAL FACILITIES NEW

Risk-Adjusted Performance

Very Weak

Over the last 90 days MEDICAL FACILITIES NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MEDICAL FACILITIES is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Geberit AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Geberit AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Geberit AG may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with MEDICAL FACILITIES and Geberit AG

The main advantage of trading using opposite MEDICAL FACILITIES and Geberit AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES 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.

The idea behind MEDICAL FACILITIES NEW and Geberit 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.