Correlation Between CompuGroup Medical and Cembra Money
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Cembra Money 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 Cembra Money 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 Cembra Money Bank, you can compare the effects of market volatilities on CompuGroup Medical and Cembra Money 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 Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Cembra Money.
Diversification Opportunities for CompuGroup Medical and Cembra Money
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CompuGroup and Cembra is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money 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 Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Cembra Money go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Cembra Money
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to generate 26.68 times more return on investment than Cembra Money. However, CompuGroup Medical is 26.68 times more volatile than Cembra Money Bank. It trades about 0.08 of its potential returns per unit of risk. Cembra Money Bank is currently generating about 0.7 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Cembra Money Bank
Performance |
| Timeline |
| CompuGroup Medical |
| Cembra Money Bank |
CompuGroup Medical and Cembra Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Cembra Money
The main advantage of trading using opposite CompuGroup Medical and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Cembra Money 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 Cembra Money will offset losses from the drop in Cembra Money'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 |
| Cembra Money vs. Sunny Optical Technology | Cembra Money vs. International Biotechnology Trust | Cembra Money vs. Pfeiffer Vacuum Technology | Cembra Money vs. Alaska Air Group |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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