Correlation Between Geratherm Medical and Inspire Medical

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

Diversification Opportunities for Geratherm Medical and Inspire Medical

-0.46

Correlation Coefficient

Geratherm Medical  Inspire Medical

Very good diversification

The 3 months correlation between Geratherm and Inspire is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Geratherm Medical AG and Inspire Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire Medical Systems 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 Inspire Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire Medical Systems has no effect on the direction of Geratherm Medical i.e., Geratherm Medical and Inspire Medical go up and down completely randomly.

Pair Corralation between Geratherm Medical and Inspire Medical

Assuming the 90 days trading horizon Geratherm Medical AG is expected to generate 1.0 times more return on investment than Inspire Medical. However, Geratherm Medical AG is 1.0 times less risky than Inspire Medical. It trades about 0.14 of its potential returns per unit of risk. Inspire Medical Systems is currently generating about -0.06 per unit of risk. If you would invest  265.00  in Geratherm Medical AG on April 22, 2025 and sell it today you would earn a total of  70.00  from holding Geratherm Medical AG or generate 26.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Geratherm Medical AG  vs.  Inspire Medical Systems

Geratherm Medical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Geratherm Medical AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Geratherm Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Inspire Medical Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inspire Medical Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Geratherm Medical and Inspire Medical

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

The idea behind Geratherm Medical AG and Inspire Medical Systems 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.