Correlation Between Geberit AG and Tecan Group

Can any of the company-specific risk be diversified away by investing in both Geberit AG and Tecan 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 Tecan 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 Tecan Group AG, you can compare the effects of market volatilities on Geberit AG and Tecan 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 Tecan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geberit AG and Tecan Group.

Diversification Opportunities for Geberit AG and Tecan Group

0.65

Correlation Coefficient

Geberit AG  Tecan Group

Poor diversification

The 3 months correlation between Geberit and Tecan is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Geberit AG and Tecan Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tecan 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 Tecan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tecan Group AG has no effect on the direction of Geberit AG i.e., Geberit AG and Tecan Group go up and down completely randomly.

Pair Corralation between Geberit AG and Tecan Group

Assuming the 90 days trading horizon Geberit AG is expected to generate 0.5 times more return on investment than Tecan Group. However, Geberit AG is 1.98 times less risky than Tecan Group. It trades about 0.19 of its potential returns per unit of risk. Tecan Group AG is currently generating about 0.06 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  6,780  from holding Geberit AG or generate 12.42% return on investment over 90 days.

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

Geberit AG  vs.  Tecan Group 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 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Geberit AG may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Tecan Group AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tecan Group AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Tecan Group may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Geberit AG and Tecan Group

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

The idea behind Geberit AG and Tecan 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.