Correlation Between Geberit AG and Verra Mobility

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

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

Diversification Opportunities for Geberit AG and Verra Mobility

0.0

Correlation Coefficient

Geberit AG  Verra Mobility

Pay attention - limited upside

The 3 months correlation between Geberit and Verra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Geberit AG ADR and Verra Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verra Mobility and Geberit AG 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 Geberit AG ADR are associated (or correlated) with Verra Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verra Mobility has no effect on the direction of Geberit AG i.e., Geberit AG and Verra Mobility go up and down completely randomly.

Pair Corralation between Geberit AG and Verra Mobility

If you would invest  5,749  in Geberit AG ADR on December 20, 2024 and sell it today you would earn a total of  827.00  from holding Geberit AG ADR or generate 14.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Geberit AG ADR  vs.  Verra Mobility

Geberit AG ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Geberit AG ADR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Geberit AG showed solid returns over the last few months and may actually be approaching a breakup point.

Verra Mobility

Risk-Adjusted Performance

Very Weak

Over the last 90 days Verra Mobility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable primary indicators, Verra Mobility is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Geberit AG and Verra Mobility

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

The idea behind Geberit AG ADR and Verra Mobility 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.