Correlation Between CompuGroup Medical and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Evolution Gaming 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 Evolution Gaming 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 Evolution Gaming Group, you can compare the effects of market volatilities on CompuGroup Medical and Evolution Gaming 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 Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Evolution Gaming.
Diversification Opportunities for CompuGroup Medical and Evolution Gaming
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CompuGroup and Evolution is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming 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 Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Evolution Gaming go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Evolution Gaming
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to generate 2.3 times more return on investment than Evolution Gaming. However, CompuGroup Medical is 2.3 times more volatile than Evolution Gaming Group. It trades about 0.09 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.25 per unit of risk. If you would invest 1,421 in CompuGroup Medical AG on August 28, 2024 and sell it today you would earn a total of 60.00 from holding CompuGroup Medical AG or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Evolution Gaming Group
Performance |
| Timeline |
| CompuGroup Medical |
| Evolution Gaming |
CompuGroup Medical and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Evolution Gaming
The main advantage of trading using opposite CompuGroup Medical and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Evolution Gaming 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 Evolution Gaming will offset losses from the drop in Evolution Gaming's long position.| CompuGroup Medical vs. Check Point Software | CompuGroup Medical vs. Pfeiffer Vacuum Technology | CompuGroup Medical vs. Grieg Seafood | CompuGroup Medical vs. Tyson Foods Cl |
| Evolution Gaming vs. Aeorema Communications Plc | Evolution Gaming vs. Molson Coors Beverage | Evolution Gaming vs. Roadside Real Estate | Evolution Gaming vs. Tyson Foods Cl |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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