Correlation Between CompuGroup Medical and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Scandinavian Tobacco 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 Scandinavian Tobacco 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 Scandinavian Tobacco Group, you can compare the effects of market volatilities on CompuGroup Medical and Scandinavian Tobacco 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 Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Scandinavian Tobacco.
Diversification Opportunities for CompuGroup Medical and Scandinavian Tobacco
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between CompuGroup and Scandinavian is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco 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 Scandinavian Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Tobacco has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Scandinavian Tobacco
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to generate 1.25 times more return on investment than Scandinavian Tobacco. However, CompuGroup Medical is 1.25 times more volatile than Scandinavian Tobacco Group. It trades about 0.2 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about -0.08 per unit of risk. If you would invest 1,411 in CompuGroup Medical AG on August 30, 2024 and sell it today you would earn a total of 149.00 from holding CompuGroup Medical AG or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| CompuGroup Medical |
| Scandinavian Tobacco |
CompuGroup Medical and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Scandinavian Tobacco
The main advantage of trading using opposite CompuGroup Medical and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Scandinavian Tobacco 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 Scandinavian Tobacco will offset losses from the drop in Scandinavian Tobacco's long position.| CompuGroup Medical vs. Tungsten West PLC | CompuGroup Medical vs. Argo Group Limited | CompuGroup Medical vs. Hardide PLC | CompuGroup Medical vs. Versarien PLC |
| Scandinavian Tobacco vs. Verizon Communications | Scandinavian Tobacco vs. Brunner Investment Trust | Scandinavian Tobacco vs. Gaztransport et Technigaz | Scandinavian Tobacco vs. Zegona Communications 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |