Correlation Between CompuGroup Medical and Auto Trader
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Auto Trader 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 Auto Trader 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 Auto Trader Group, you can compare the effects of market volatilities on CompuGroup Medical and Auto Trader 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 Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Auto Trader.
Diversification Opportunities for CompuGroup Medical and Auto Trader
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompuGroup and Auto is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group 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 Auto Trader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auto Trader Group has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Auto Trader go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Auto Trader
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to under-perform the Auto Trader. In addition to that, CompuGroup Medical is 1.77 times more volatile than Auto Trader Group. It trades about -0.05 of its total potential returns per unit of risk. Auto Trader Group is currently generating about 0.07 per unit of volatility. If you would invest 54,220 in Auto Trader Group on September 2, 2024 and sell it today you would earn a total of 29,680 from holding Auto Trader Group or generate 54.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Auto Trader Group
Performance |
| Timeline |
| CompuGroup Medical |
| Auto Trader Group |
CompuGroup Medical and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Auto Trader
The main advantage of trading using opposite CompuGroup Medical and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Auto Trader 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 Auto Trader will offset losses from the drop in Auto Trader's long position.| CompuGroup Medical vs. Uniper SE | CompuGroup Medical vs. Mulberry Group PLC | CompuGroup Medical vs. London Security Plc | CompuGroup Medical vs. Triad Group PLC |
| Auto Trader vs. Catalyst Media Group | Auto Trader vs. Tamburi Investment Partners | Auto Trader vs. Magnora ASA | Auto Trader vs. RTW Venture Fund |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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