Correlation Between BJs Wholesale and Geratherm Medical

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

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

Diversification Opportunities for BJs Wholesale and Geratherm Medical

-0.55

Correlation Coefficient

BJs Wholesale  Geratherm Medical

Excellent diversification

The 3 months correlation between BJs and Geratherm is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and BJs Wholesale 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 BJs Wholesale Club 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 BJs Wholesale i.e., BJs Wholesale and Geratherm Medical go up and down completely randomly.

Pair Corralation between BJs Wholesale and Geratherm Medical

Assuming the 90 days horizon BJs Wholesale Club is expected to under-perform the Geratherm Medical. But the stock apears to be less risky and, when comparing its historical volatility, BJs Wholesale Club is 1.52 times less risky than Geratherm Medical. The stock trades about -0.09 of its potential returns per unit of risk. The Geratherm Medical AG is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  265.00  in Geratherm Medical AG on April 22, 2025 and sell it today you would earn a total of  63.00  from holding Geratherm Medical AG or generate 23.77% return on investment over 90 days.

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

BJs Wholesale Club  vs.  Geratherm Medical AG

BJs Wholesale Club

Risk-Adjusted Performance

Very Weak

Over the last 90 days BJs Wholesale Club has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 BJs Wholesale and Geratherm Medical

The main advantage of trading using opposite BJs Wholesale and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale 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 BJs Wholesale Club 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.