Correlation Between CompuGroup Medical and Iron Mountain
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Iron Mountain 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 Iron Mountain 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 Iron Mountain, you can compare the effects of market volatilities on CompuGroup Medical and Iron Mountain 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 Iron Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Iron Mountain.
Diversification Opportunities for CompuGroup Medical and Iron Mountain
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompuGroup and Iron is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Iron Mountain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain 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 Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Iron Mountain go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Iron Mountain
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to under-perform the Iron Mountain. In addition to that, CompuGroup Medical is 1.71 times more volatile than Iron Mountain. It trades about -0.09 of its total potential returns per unit of risk. Iron Mountain is currently generating about 0.15 per unit of volatility. If you would invest 5,267 in Iron Mountain on August 31, 2024 and sell it today you would earn a total of 7,216 from holding Iron Mountain or generate 137.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Iron Mountain
Performance |
| Timeline |
| CompuGroup Medical |
| Iron Mountain |
CompuGroup Medical and Iron Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Iron Mountain
The main advantage of trading using opposite CompuGroup Medical and Iron Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Iron Mountain 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 Iron Mountain will offset losses from the drop in Iron Mountain's long position.| CompuGroup Medical vs. Neometals | CompuGroup Medical vs. Coor Service Management | CompuGroup Medical vs. Aeorema Communications Plc | CompuGroup Medical vs. JLEN Environmental Assets |
| Iron Mountain vs. Neometals | Iron Mountain vs. Coor Service Management | Iron Mountain vs. Aeorema Communications Plc | Iron Mountain vs. JLEN Environmental Assets |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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