Correlation Between CompuGroup Medical and Royal Bank
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Royal Bank 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 Royal Bank 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 Royal Bank of, you can compare the effects of market volatilities on CompuGroup Medical and Royal Bank 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 Royal Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Royal Bank.
Diversification Opportunities for CompuGroup Medical and Royal Bank
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompuGroup and Royal is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Royal Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal 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 Royal Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Bank has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Royal Bank go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Royal Bank
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to generate 27.29 times more return on investment than Royal Bank. However, CompuGroup Medical is 27.29 times more volatile than Royal Bank of. It trades about 0.08 of its potential returns per unit of risk. Royal Bank of is currently generating about 0.02 per unit of risk. If you would invest 1,622 in CompuGroup Medical AG on October 22, 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 Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Royal Bank of
Performance |
| Timeline |
| CompuGroup Medical |
| Royal Bank |
CompuGroup Medical and Royal Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Royal Bank
The main advantage of trading using opposite CompuGroup Medical and Royal Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Royal Bank 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 Royal Bank will offset losses from the drop in Royal Bank's long position.| CompuGroup Medical vs. Hochschild Mining plc | CompuGroup Medical vs. JD Sports Fashion | CompuGroup Medical vs. Charter Communications Cl | CompuGroup Medical vs. Wizz Air Holdings |
| Royal Bank vs. MTI Wireless Edge | Royal Bank vs. Mobile Tornado Group | Royal Bank vs. Aptitude Software Group | Royal Bank vs. Take Two Interactive Software |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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