Correlation Between GERATHERM MEDICAL and REGAL ASIAN

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

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

Diversification Opportunities for GERATHERM MEDICAL and REGAL ASIAN

0.82

Correlation Coefficient

GERATHERM MEDICAL  REGAL ASIAN

Very poor diversification

The 3 months correlation between GERATHERM and REGAL is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding GERATHERM MEDICAL and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS and GERATHERM MEDICAL 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 GERATHERM MEDICAL are associated (or correlated) with REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of GERATHERM MEDICAL i.e., GERATHERM MEDICAL and REGAL ASIAN go up and down completely randomly.

Pair Corralation between GERATHERM MEDICAL and REGAL ASIAN

Assuming the 90 days trading horizon GERATHERM MEDICAL is expected to generate 1.08 times less return on investment than REGAL ASIAN. In addition to that, GERATHERM MEDICAL is 1.47 times more volatile than REGAL ASIAN INVESTMENTS. It trades about 0.13 of its total potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about 0.21 per unit of volatility. If you would invest  86.00  in REGAL ASIAN INVESTMENTS on April 20, 2025 and sell it today you would earn a total of  22.00  from holding REGAL ASIAN INVESTMENTS or generate 25.58% return on investment over 90 days.

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

GERATHERM MEDICAL  vs.  REGAL ASIAN INVESTMENTS

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.

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in REGAL ASIAN INVESTMENTS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, REGAL ASIAN reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GERATHERM MEDICAL and REGAL ASIAN

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

The idea behind GERATHERM MEDICAL and REGAL ASIAN INVESTMENTS 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.