Correlation Between Geberit AG and Clariant

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

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

Diversification Opportunities for Geberit AG and Clariant

0.32

Correlation Coefficient

Geberit AG  Clariant

Weak diversification

The 3 months correlation between Geberit and Clariant is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Geberit AG and Clariant AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clariant AG and Geberit AG 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 Geberit AG are associated (or correlated) with Clariant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clariant AG has no effect on the direction of Geberit AG i.e., Geberit AG and Clariant go up and down completely randomly.

Pair Corralation between Geberit AG and Clariant

Assuming the 90 days trading horizon Geberit AG is expected to generate 0.54 times more return on investment than Clariant. However, Geberit AG is 1.87 times less risky than Clariant. It trades about 0.23 of its potential returns per unit of risk. Clariant AG is currently generating about 0.05 per unit of risk. If you would invest  53,980  in Geberit AG on April 22, 2025 and sell it today you would earn a total of  8,180  from holding Geberit AG or generate 15.15% return on investment over 90 days.

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

Geberit AG  vs.  Clariant AG

Geberit AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Geberit AG are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Geberit AG showed solid returns over the last few months and may actually be approaching a breakup point.

Clariant AG

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clariant AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Clariant may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Geberit AG and Clariant

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

The idea behind Geberit AG and Clariant 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.