Correlation Between ETFS Coffee and Geratherm Medical

Can any of the company-specific risk be diversified away by investing in both ETFS Coffee and Geratherm 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 ETFS Coffee and Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ETFS Coffee ETC and Geratherm Medical AG, you can compare the effects of market volatilities on ETFS Coffee and Geratherm 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 ETFS Coffee with a short position of Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and Geratherm Medical.

Diversification Opportunities for ETFS Coffee and Geratherm Medical

-0.41

Correlation Coefficient

ETFS Coffee  Geratherm Medical

Very good diversification

The 3 months correlation between ETFS and Geratherm is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and ETFS Coffee 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 ETFS Coffee ETC are associated (or correlated) with Geratherm Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geratherm Medical has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and Geratherm Medical go up and down completely randomly.

Pair Corralation between ETFS Coffee and Geratherm Medical

Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 13.91 times more return on investment than Geratherm Medical. However, ETFS Coffee is 13.91 times more volatile than Geratherm Medical AG. It trades about 0.05 of its potential returns per unit of risk. Geratherm Medical AG is currently generating about -0.03 per unit of risk. If you would invest  97.00  in ETFS Coffee ETC on April 13, 2025 and sell it today you would earn a total of  4,235  from holding ETFS Coffee ETC or generate 4365.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.84%
Values	Daily Returns

ETFS Coffee ETC  vs.  Geratherm Medical AG

ETFS Coffee ETC

Risk-Adjusted Performance

Very Weak

Over the last 90 days ETFS Coffee ETC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Geratherm Medical

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Geratherm Medical AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Geratherm Medical may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with ETFS Coffee and Geratherm Medical

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

The idea behind ETFS Coffee ETC and Geratherm Medical 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.

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