Correlation Between ATT and GERATHERM MEDICAL

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

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

Diversification Opportunities for ATT and GERATHERM MEDICAL

-0.08

Correlation Coefficient

ATT  GERATHERM MEDICAL

Good diversification

The 3 months correlation between ATT and GERATHERM is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and GERATHERM MEDICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GERATHERM MEDICAL and ATT 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 ATT Inc 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 ATT i.e., ATT and GERATHERM MEDICAL go up and down completely randomly.

Pair Corralation between ATT and GERATHERM MEDICAL

Assuming the 90 days trading horizon ATT Inc is expected to under-perform the GERATHERM MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, ATT Inc is 1.91 times less risky than GERATHERM MEDICAL. The stock trades about 0.0 of its potential returns per unit of risk. The GERATHERM MEDICAL is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  269.00  in GERATHERM MEDICAL on April 22, 2025 and sell it today you would earn a total of  59.00  from holding GERATHERM MEDICAL or generate 21.93% return on investment over 90 days.

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

ATT Inc  vs.  GERATHERM MEDICAL

ATT Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days ATT Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, ATT is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with ATT and GERATHERM MEDICAL

The main advantage of trading using opposite ATT and GERATHERM MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT 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 ATT Inc and GERATHERM MEDICAL 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.