Correlation Between Apple and GERATHERM MEDICAL

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

By analyzing existing cross correlation between Apple Inc and GERATHERM MEDICAL, you can compare the effects of market volatilities on Apple 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 Apple with a short position of GERATHERM MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and GERATHERM MEDICAL.

Diversification Opportunities for Apple and GERATHERM MEDICAL

-0.04

Correlation Coefficient

Apple  GERATHERM MEDICAL

Good diversification

The 3 months correlation between Apple and GERATHERM is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and GERATHERM MEDICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GERATHERM MEDICAL and Apple 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 Apple Inc 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 Apple i.e., Apple and GERATHERM MEDICAL go up and down completely randomly.

Pair Corralation between Apple and GERATHERM MEDICAL

Assuming the 90 days trading horizon Apple is expected to generate 4.03 times less return on investment than GERATHERM MEDICAL. But when comparing it to its historical volatility, Apple Inc is 1.48 times less risky than GERATHERM MEDICAL. It trades about 0.05 of its potential returns per unit of risk. GERATHERM MEDICAL is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  269.00  in GERATHERM MEDICAL on April 20, 2025 and sell it today you would earn a total of  59.00  from holding GERATHERM MEDICAL or generate 21.93% return on investment over 90 days.

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

Apple Inc  vs.  GERATHERM MEDICAL

Apple Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Apple is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

GERATHERM MEDICAL

Risk-Adjusted Performance

OK

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

Pair Trading with Apple and GERATHERM MEDICAL

The main advantage of trading using opposite Apple and GERATHERM MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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 Apple Inc and GERATHERM MEDICAL 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.