Correlation Between CompuGroup Medical and Aurora Investment
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Aurora Investment 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 Aurora Investment 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 Aurora Investment Trust, you can compare the effects of market volatilities on CompuGroup Medical and Aurora Investment 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 Aurora Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Aurora Investment.
Diversification Opportunities for CompuGroup Medical and Aurora Investment
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between CompuGroup and Aurora is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Aurora Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Investment Trust 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 Aurora Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Investment Trust has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Aurora Investment go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Aurora Investment
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to under-perform the Aurora Investment. In addition to that, CompuGroup Medical is 2.14 times more volatile than Aurora Investment Trust. It trades about -0.05 of its total potential returns per unit of risk. Aurora Investment Trust is currently generating about 0.03 per unit of volatility. If you would invest 20,070 in Aurora Investment Trust on August 31, 2024 and sell it today you would earn a total of 3,030 from holding Aurora Investment Trust or generate 15.1% 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. Aurora Investment Trust
Performance |
| Timeline |
| CompuGroup Medical |
| Aurora Investment Trust |
CompuGroup Medical and Aurora Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Aurora Investment
The main advantage of trading using opposite CompuGroup Medical and Aurora Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Aurora Investment 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 Aurora Investment will offset losses from the drop in Aurora Investment's long position.| CompuGroup Medical vs. Neometals | CompuGroup Medical vs. Coor Service Management | CompuGroup Medical vs. Aeorema Communications Plc | CompuGroup Medical vs. JLEN Environmental Assets |
| Aurora Investment vs. Allianz Technology Trust | Aurora Investment vs. Sabien Technology Group | Aurora Investment vs. Albion Technology General | Aurora Investment vs. CompuGroup Medical AG |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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