Correlation Between Geratherm Medical and WisdomTree Investments
Can any of the company-specific risk be diversified away by investing in both Geratherm Medical and WisdomTree Investments 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 WisdomTree Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geratherm Medical AG and WisdomTree Investments, you can compare the effects of market volatilities on Geratherm Medical and WisdomTree Investments 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 WisdomTree Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geratherm Medical and WisdomTree Investments.
Diversification Opportunities for Geratherm Medical and WisdomTree Investments
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Geratherm and WisdomTree is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Geratherm Medical AG and WisdomTree Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree 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 AG are associated (or correlated) with WisdomTree Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Investments has no effect on the direction of Geratherm Medical i.e., Geratherm Medical and WisdomTree Investments go up and down completely randomly.
Pair Corralation between Geratherm Medical and WisdomTree Investments
Assuming the 90 days trading horizon Geratherm Medical is expected to generate 2.11 times less return on investment than WisdomTree Investments. In addition to that, Geratherm Medical is 1.22 times more volatile than WisdomTree Investments. It trades about 0.13 of its total potential returns per unit of risk. WisdomTree Investments is currently generating about 0.34 per unit of volatility. If you would invest 693.00 in WisdomTree Investments on April 22, 2025 and sell it today you would earn a total of 431.00 from holding WisdomTree Investments or generate 62.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Geratherm Medical AG vs. WisdomTree Investments
Performance |
Timeline |
Geratherm Medical |
WisdomTree Investments |
Geratherm Medical and WisdomTree Investments Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Geratherm Medical and WisdomTree Investments
The main advantage of trading using opposite Geratherm Medical and WisdomTree Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geratherm Medical position performs unexpectedly, WisdomTree Investments 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 WisdomTree Investments will offset losses from the drop in WisdomTree Investments' long position.Geratherm Medical vs. SILICON LABORATOR | Geratherm Medical vs. AUST AGRICULTURAL | Geratherm Medical vs. AGRICULTBK HADR25 YC | Geratherm Medical vs. Granite Construction |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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