Correlation Between Mettler Toledo and Global Wholehealth

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

By analyzing existing cross correlation between Mettler Toledo International and Global Wholehealth Partners, you can compare the effects of market volatilities on Mettler Toledo and Global Wholehealth 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 Mettler Toledo with a short position of Global Wholehealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mettler Toledo and Global Wholehealth.

Diversification Opportunities for Mettler Toledo and Global Wholehealth

-0.26

Correlation Coefficient

Mettler Toledo  Global Wholehealth

Very good diversification

The 3 months correlation between Mettler and Global is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mettler Toledo International and Global Wholehealth Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Wholehealth and Mettler Toledo 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 Mettler Toledo International are associated (or correlated) with Global Wholehealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Wholehealth has no effect on the direction of Mettler Toledo i.e., Mettler Toledo and Global Wholehealth go up and down completely randomly.

Pair Corralation between Mettler Toledo and Global Wholehealth

If you would invest  123,074  in Mettler Toledo International on October 21, 2024 and sell it today you would earn a total of  6,469  from holding Mettler Toledo International or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Mettler Toledo International  vs.  Global Wholehealth Partners

Mettler Toledo Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mettler Toledo International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Mettler Toledo is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Global Wholehealth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Wholehealth Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, Global Wholehealth is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Mettler Toledo and Global Wholehealth

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

The idea behind Mettler Toledo International and Global Wholehealth Partners 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.