Correlation Between CompuGroup Medical and Pharol SGPS
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Pharol SGPS 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 CompuGroup Medical and Pharol SGPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompuGroup Medical AG and Pharol SGPS SA, you can compare the effects of market volatilities on CompuGroup Medical and Pharol SGPS 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 CompuGroup Medical with a short position of Pharol SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Pharol SGPS.
Diversification Opportunities for CompuGroup Medical and Pharol SGPS
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompuGroup and Pharol is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Pharol SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharol SGPS SA and CompuGroup 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 CompuGroup Medical AG are associated (or correlated) with Pharol SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharol SGPS SA has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Pharol SGPS go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Pharol SGPS
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to generate 0.53 times more return on investment than Pharol SGPS. However, CompuGroup Medical AG is 1.87 times less risky than Pharol SGPS. It trades about 0.22 of its potential returns per unit of risk. Pharol SGPS SA is currently generating about 0.08 per unit of risk. If you would invest 1,350 in CompuGroup Medical AG on September 13, 2024 and sell it today you would earn a total of 272.00 from holding CompuGroup Medical AG or generate 20.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Pharol SGPS SA
Performance |
| Timeline |
| CompuGroup Medical |
| Pharol SGPS SA |
CompuGroup Medical and Pharol SGPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Pharol SGPS
The main advantage of trading using opposite CompuGroup Medical and Pharol SGPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Pharol SGPS 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 Pharol SGPS will offset losses from the drop in Pharol SGPS's long position.| CompuGroup Medical vs. Fevertree Drinks Plc | CompuGroup Medical vs. Datalogic | CompuGroup Medical vs. National Beverage Corp | CompuGroup Medical vs. Scandic Hotels Group |
| Pharol SGPS vs. CompuGroup Medical AG | Pharol SGPS vs. Jupiter Fund Management | Pharol SGPS vs. Futura Medical | Pharol SGPS vs. Impax Asset Management |
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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