Correlation Between CompuGroup Medical and Baring Emerging
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Baring Emerging 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 Baring Emerging 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 Baring Emerging Europe, you can compare the effects of market volatilities on CompuGroup Medical and Baring Emerging 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 Baring Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Baring Emerging.
Diversification Opportunities for CompuGroup Medical and Baring Emerging
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CompuGroup and Baring is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Baring Emerging Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baring Emerging Europe 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 Baring Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baring Emerging Europe has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Baring Emerging go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Baring Emerging
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to under-perform the Baring Emerging. In addition to that, CompuGroup Medical is 1.97 times more volatile than Baring Emerging Europe. It trades about -0.06 of its total potential returns per unit of risk. Baring Emerging Europe is currently generating about 0.04 per unit of volatility. If you would invest 50,043 in Baring Emerging Europe on September 4, 2024 and sell it today you would earn a total of 11,957 from holding Baring Emerging Europe or generate 23.89% 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. Baring Emerging Europe
Performance |
| Timeline |
| CompuGroup Medical |
| Baring Emerging Europe |
CompuGroup Medical and Baring Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Baring Emerging
The main advantage of trading using opposite CompuGroup Medical and Baring Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Baring Emerging 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 Baring Emerging will offset losses from the drop in Baring Emerging's long position.| CompuGroup Medical vs. iShares Physical Silver | CompuGroup Medical vs. Hochschild Mining plc | CompuGroup Medical vs. Cembra Money Bank | CompuGroup Medical vs. Eastinco Mining Exploration |
| Baring Emerging vs. SupplyMe Capital PLC | Baring Emerging vs. Lloyds Banking Group | Baring Emerging vs. Premier African Minerals | Baring Emerging vs. SANTANDER UK 8 |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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