Correlation Between CompuGroup Medical and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Ebro Foods 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 Ebro Foods 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 Ebro Foods, you can compare the effects of market volatilities on CompuGroup Medical and Ebro Foods 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 Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Ebro Foods.
Diversification Opportunities for CompuGroup Medical and Ebro Foods
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompuGroup and Ebro is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods 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 Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Ebro Foods go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Ebro Foods
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to generate 3.64 times more return on investment than Ebro Foods. However, CompuGroup Medical is 3.64 times more volatile than Ebro Foods. It trades about 0.07 of its potential returns per unit of risk. Ebro Foods is currently generating about -0.14 per unit of risk. If you would invest 1,363 in CompuGroup Medical AG on August 24, 2024 and sell it today you would earn a total of 40.00 from holding CompuGroup Medical AG or generate 2.93% 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. Ebro Foods
Performance |
| Timeline |
| CompuGroup Medical |
| Ebro Foods |
CompuGroup Medical and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Ebro Foods
The main advantage of trading using opposite CompuGroup Medical and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Ebro Foods 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 Ebro Foods will offset losses from the drop in Ebro Foods' long position.| CompuGroup Medical vs. Quadrise Plc | CompuGroup Medical vs. Intuitive Investments Group | CompuGroup Medical vs. European Metals Holdings | CompuGroup Medical vs. Athelney Trust plc |
| Ebro Foods vs. Quadrise Plc | Ebro Foods vs. Intuitive Investments Group | Ebro Foods vs. European Metals Holdings | Ebro Foods vs. Athelney Trust plc |
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.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |