Correlation Between CompuGroup Medical and Erste Group
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Erste Group 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 Erste Group 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 Erste Group Bank, you can compare the effects of market volatilities on CompuGroup Medical and Erste Group 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 Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Erste Group.
Diversification Opportunities for CompuGroup Medical and Erste Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CompuGroup and Erste is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank 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 Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Erste Group go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Erste Group
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to generate 14.42 times more return on investment than Erste Group. However, CompuGroup Medical is 14.42 times more volatile than Erste Group Bank. It trades about 0.08 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.3 per unit of risk. If you would invest 1,622 in CompuGroup Medical AG on October 7, 2024 and sell it today you would earn a total of 0.00 from holding CompuGroup Medical AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Erste Group Bank
Performance |
| Timeline |
| CompuGroup Medical |
| Erste Group Bank |
CompuGroup Medical and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Erste Group
The main advantage of trading using opposite CompuGroup Medical and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group's long position.| CompuGroup Medical vs. Uniper SE | CompuGroup Medical vs. Codex Acquisitions PLC | CompuGroup Medical vs. Ikigai Ventures | CompuGroup Medical vs. Heavitree Brewery |
| Erste Group vs. Chrysalis Investments | Erste Group vs. Lindsell Train Investment | Erste Group vs. Mobius Investment Trust | Erste Group vs. Home Depot |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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