Correlation Between CN ALUMINUM and Geratherm Medical

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

By analyzing existing cross correlation between CN ALUMINUM INT and Geratherm Medical AG, you can compare the effects of market volatilities on CN ALUMINUM and Geratherm Medical 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 CN ALUMINUM with a short position of Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN ALUMINUM and Geratherm Medical.

Diversification Opportunities for CN ALUMINUM and Geratherm Medical

0.46

Correlation Coefficient

CN ALUMINUM  Geratherm Medical

Very weak diversification

The 3 months correlation between 4AI and Geratherm is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CN ALUMINUM INT and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and CN ALUMINUM 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 CN ALUMINUM INT are associated (or correlated) with Geratherm Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geratherm Medical has no effect on the direction of CN ALUMINUM i.e., CN ALUMINUM and Geratherm Medical go up and down completely randomly.

Pair Corralation between CN ALUMINUM and Geratherm Medical

Assuming the 90 days trading horizon CN ALUMINUM INT is expected to generate 1.13 times more return on investment than Geratherm Medical. However, CN ALUMINUM is 1.13 times more volatile than Geratherm Medical AG. It trades about 0.15 of its potential returns per unit of risk. Geratherm Medical AG is currently generating about 0.13 per unit of risk. If you would invest  20.00  in CN ALUMINUM INT on April 22, 2025 and sell it today you would earn a total of  6.00  from holding CN ALUMINUM INT or generate 30.0% return on investment over 90 days.

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

CN ALUMINUM INT  vs.  Geratherm Medical AG

CN ALUMINUM INT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CN ALUMINUM INT are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, CN ALUMINUM exhibited solid returns over the last few months and may actually be approaching a breakup point.

Geratherm Medical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Geratherm Medical AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Geratherm Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CN ALUMINUM and Geratherm Medical

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

The idea behind CN ALUMINUM INT and Geratherm Medical 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 Stocks Directory module to find actively traded stocks across global markets.