Correlation Between CompuGroup Medical and Capital Drilling
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Capital Drilling 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 Capital Drilling 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 Capital Drilling, you can compare the effects of market volatilities on CompuGroup Medical and Capital Drilling 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 Capital Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Capital Drilling.
Diversification Opportunities for CompuGroup Medical and Capital Drilling
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CompuGroup and Capital is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Capital Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Drilling 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 Capital Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Drilling has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Capital Drilling go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Capital Drilling
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to under-perform the Capital Drilling. In addition to that, CompuGroup Medical is 1.38 times more volatile than Capital Drilling. It trades about -0.09 of its total potential returns per unit of risk. Capital Drilling is currently generating about 0.0 per unit of volatility. If you would invest 9,087 in Capital Drilling on August 31, 2024 and sell it today you would lose (707.00) from holding Capital Drilling or give up 7.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Capital Drilling
Performance |
| Timeline |
| CompuGroup Medical |
| Capital Drilling |
CompuGroup Medical and Capital Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Capital Drilling
The main advantage of trading using opposite CompuGroup Medical and Capital Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Capital Drilling 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 Capital Drilling will offset losses from the drop in Capital Drilling'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 |
| Capital Drilling vs. Zoom Video Communications | Capital Drilling vs. Enbridge | Capital Drilling vs. Coor Service Management | Capital Drilling vs. Surgical Science Sweden |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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