Correlation Between CompuGroup Medical and United States
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and United States 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 United States 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 United States Steel, you can compare the effects of market volatilities on CompuGroup Medical and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and United States.
Diversification Opportunities for CompuGroup Medical and United States
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CompuGroup and United is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and United States go up and down completely randomly.
Pair Corralation between CompuGroup Medical and United States
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to under-perform the United States. But the stock apears to be less risky and, when comparing its historical volatility, CompuGroup Medical AG is 1.13 times less risky than United States. The stock trades about -0.1 of its potential returns per unit of risk. The United States Steel is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,601 in United States Steel on August 27, 2024 and sell it today you would earn a total of 375.00 from holding United States Steel or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
CompuGroup Medical AG vs. United States Steel
Performance |
| Timeline |
| CompuGroup Medical |
| United States Steel |
CompuGroup Medical and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and United States
The main advantage of trading using opposite CompuGroup Medical and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| CompuGroup Medical vs. Samsung Electronics Co | CompuGroup Medical vs. Samsung Electronics Co | CompuGroup Medical vs. Hyundai Motor | CompuGroup Medical vs. Toyota Motor Corp |
| United States vs. Samsung Electronics Co | United States vs. Samsung Electronics Co | United States vs. Hyundai Motor | United States vs. Toyota Motor Corp |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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