Correlation Between Carl Zeiss and GlucoTrack

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

By analyzing existing cross correlation between Carl Zeiss Meditec and GlucoTrack, you can compare the effects of market volatilities on Carl Zeiss and GlucoTrack 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 Carl Zeiss with a short position of GlucoTrack. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carl Zeiss and GlucoTrack.

Diversification Opportunities for Carl Zeiss and GlucoTrack

-0.75

Correlation Coefficient

Carl Zeiss  GlucoTrack

Pay attention - limited upside

The 3 months correlation between Carl and GlucoTrack is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Carl Zeiss Meditec and GlucoTrack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlucoTrack and Carl Zeiss 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 Carl Zeiss Meditec are associated (or correlated) with GlucoTrack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlucoTrack has no effect on the direction of Carl Zeiss i.e., Carl Zeiss and GlucoTrack go up and down completely randomly.

Pair Corralation between Carl Zeiss and GlucoTrack

Assuming the 90 days horizon Carl Zeiss Meditec is expected to generate 0.28 times more return on investment than GlucoTrack. However, Carl Zeiss Meditec is 3.62 times less risky than GlucoTrack. It trades about 0.19 of its potential returns per unit of risk. GlucoTrack is currently generating about -0.32 per unit of risk. If you would invest  4,733  in Carl Zeiss Meditec on December 29, 2024 and sell it today you would earn a total of  2,269  from holding Carl Zeiss Meditec or generate 47.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Carl Zeiss Meditec  vs.  GlucoTrack

Carl Zeiss Meditec

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Carl Zeiss Meditec are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Carl Zeiss showed solid returns over the last few months and may actually be approaching a breakup point.

GlucoTrack

Risk-Adjusted Performance

Very Weak

Over the last 90 days GlucoTrack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Carl Zeiss and GlucoTrack

The main advantage of trading using opposite Carl Zeiss and GlucoTrack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carl Zeiss position performs unexpectedly, GlucoTrack 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 GlucoTrack will offset losses from the drop in GlucoTrack's long position.

The idea behind Carl Zeiss Meditec and GlucoTrack 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.