Correlation Between GERATHERM MEDICAL and Trade Desk

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

By analyzing existing cross correlation between GERATHERM MEDICAL and The Trade Desk, you can compare the effects of market volatilities on GERATHERM MEDICAL and Trade Desk 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 Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of GERATHERM MEDICAL and Trade Desk.

Diversification Opportunities for GERATHERM MEDICAL and Trade Desk

0.75

Correlation Coefficient

GERATHERM MEDICAL  Trade Desk

Poor diversification

The 3 months correlation between GERATHERM and Trade is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding GERATHERM MEDICAL and The Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk 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 Trade Desk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Desk has no effect on the direction of GERATHERM MEDICAL i.e., GERATHERM MEDICAL and Trade Desk go up and down completely randomly.

Pair Corralation between GERATHERM MEDICAL and Trade Desk

Assuming the 90 days trading horizon GERATHERM MEDICAL is expected to generate 2.29 times less return on investment than Trade Desk. But when comparing it to its historical volatility, GERATHERM MEDICAL is 1.49 times less risky than Trade Desk. It trades about 0.12 of its potential returns per unit of risk. The Trade Desk is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  4,676  in The Trade Desk on April 24, 2025 and sell it today you would earn a total of  2,270  from holding The Trade Desk or generate 48.55% return on investment over 90 days.

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

GERATHERM MEDICAL  vs.  The Trade Desk

GERATHERM MEDICAL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GERATHERM MEDICAL are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GERATHERM MEDICAL unveiled solid returns over the last few months and may actually be approaching a breakup point.

Trade Desk

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Trade Desk are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Trade Desk unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GERATHERM MEDICAL and Trade Desk

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

The idea behind GERATHERM MEDICAL and The Trade Desk 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.