Correlation Between Geberit AG and Lonza Group
Can any of the company-specific risk be diversified away by investing in both Geberit AG and Lonza Group 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 Lonza Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geberit AG and Lonza Group AG, you can compare the effects of market volatilities on Geberit AG and Lonza Group 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 Lonza Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geberit AG and Lonza Group.
Diversification Opportunities for Geberit AG and Lonza Group
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Geberit and Lonza is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Geberit AG and Lonza Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonza Group 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 Lonza Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonza Group AG has no effect on the direction of Geberit AG i.e., Geberit AG and Lonza Group go up and down completely randomly.
Pair Corralation between Geberit AG and Lonza Group
Assuming the 90 days trading horizon Geberit AG is expected to generate 0.98 times more return on investment than Lonza Group. However, Geberit AG is 1.02 times less risky than Lonza Group. It trades about 0.2 of its potential returns per unit of risk. Lonza Group AG is currently generating about 0.01 per unit of risk. If you would invest 54,580 in Geberit AG on April 23, 2025 and sell it today you would earn a total of 7,180 from holding Geberit AG or generate 13.16% 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. Lonza Group AG
Performance |
Timeline |
Geberit AG |
Lonza Group AG |
Geberit AG and Lonza Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Geberit AG and Lonza Group
The main advantage of trading using opposite Geberit AG and Lonza Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geberit AG position performs unexpectedly, Lonza Group 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 Lonza Group will offset losses from the drop in Lonza Group's long position.The idea behind Geberit AG and Lonza Group 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.Lonza Group vs. Sika AG | Lonza Group vs. Givaudan SA | Lonza Group vs. Geberit AG | Lonza Group vs. Swiss Life Holding |
Check out your portfolio center.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |