Correlation Between Extra Space and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Extra Space and CompuGroup 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 Extra Space and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extra Space Storage and CompuGroup Medical AG, you can compare the effects of market volatilities on Extra Space and CompuGroup 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 Extra Space with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and CompuGroup Medical.
Diversification Opportunities for Extra Space and CompuGroup Medical
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Extra and CompuGroup is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and CompuGroup Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Extra Space 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 Extra Space Storage are associated (or correlated) with CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of Extra Space i.e., Extra Space and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Extra Space and CompuGroup Medical
Assuming the 90 days trading horizon Extra Space Storage is expected to under-perform the CompuGroup Medical. But the stock apears to be less risky and, when comparing its historical volatility, Extra Space Storage is 1.25 times less risky than CompuGroup Medical. The stock trades about -0.06 of its potential returns per unit of risk. The CompuGroup Medical AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,423 in CompuGroup Medical AG on August 29, 2024 and sell it today you would earn a total of 104.00 from holding CompuGroup Medical AG or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. CompuGroup Medical AG
Performance |
| Timeline |
| Extra Space Storage |
| CompuGroup Medical |
Extra Space and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and CompuGroup Medical
The main advantage of trading using opposite Extra Space and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, CompuGroup 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| Extra Space vs. Lendinvest PLC | Extra Space vs. Neometals | Extra Space vs. Coor Service Management | Extra Space vs. Albion Technology General |
| CompuGroup Medical vs. Lendinvest PLC | CompuGroup Medical vs. Neometals | CompuGroup Medical vs. Coor Service Management | CompuGroup Medical vs. Albion Technology General |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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