Correlation Between SCANDMEDICAL SOLDK-040 and Geberit AG

Can any of the company-specific risk be diversified away by investing in both SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 and Geberit AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SCANDMEDICAL SOLDK 040 and Geberit AG, you can compare the effects of market volatilities on SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 with a short position of Geberit AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANDMEDICAL SOLDK-040 and Geberit AG.

Diversification Opportunities for SCANDMEDICAL SOLDK-040 and Geberit AG

0.3

Correlation Coefficient

SCANDMEDICAL SOLDK-040  Geberit AG

Weak diversification

The 3 months correlation between SCANDMEDICAL and Geberit is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SCANDMEDICAL SOLDK 040 and Geberit AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geberit AG and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK 040 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 SCANDMEDICAL SOLDK-040 i.e., SCANDMEDICAL SOLDK-040 and Geberit AG go up and down completely randomly.

Pair Corralation between SCANDMEDICAL SOLDK-040 and Geberit AG

Assuming the 90 days horizon SCANDMEDICAL SOLDK 040 is expected to generate 1.01 times more return on investment than Geberit AG. However, SCANDMEDICAL SOLDK-040 is 1.01 times more volatile than Geberit AG. It trades about -0.14 of its potential returns per unit of risk. Geberit AG is currently generating about -0.19 per unit of risk. If you would invest  77.00  in SCANDMEDICAL SOLDK 040 on October 10, 2024 and sell it today you would lose (4.00) from holding SCANDMEDICAL SOLDK 040 or give up 5.19% of portfolio value over 90 days.

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

SCANDMEDICAL SOLDK 040  vs.  Geberit AG

SCANDMEDICAL SOLDK 040

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCANDMEDICAL SOLDK 040 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SCANDMEDICAL SOLDK-040 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Geberit AG

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Geberit AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Geberit AG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SCANDMEDICAL SOLDK-040 and Geberit AG

The main advantage of trading using opposite SCANDMEDICAL SOLDK-040 and Geberit AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK 040 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.