Correlation Between CompuGroup Medical and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Dalata Hotel 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 Dalata Hotel 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 Dalata Hotel Group, you can compare the effects of market volatilities on CompuGroup Medical and Dalata Hotel 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 Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Dalata Hotel.
Diversification Opportunities for CompuGroup Medical and Dalata Hotel
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CompuGroup and Dalata is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel 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 Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Dalata Hotel go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Dalata Hotel
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to generate 1.18 times more return on investment than Dalata Hotel. However, CompuGroup Medical is 1.18 times more volatile than Dalata Hotel Group. It trades about 0.33 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.17 per unit of risk. If you would invest 1,365 in CompuGroup Medical AG on September 2, 2024 and sell it today you would earn a total of 230.00 from holding CompuGroup Medical AG or generate 16.85% 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. Dalata Hotel Group
Performance |
| Timeline |
| CompuGroup Medical |
| Dalata Hotel Group |
CompuGroup Medical and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Dalata Hotel
The main advantage of trading using opposite CompuGroup Medical and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel'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 |
| Dalata Hotel vs. Odfjell Drilling | Dalata Hotel vs. Sabien Technology Group | Dalata Hotel vs. Eastman Chemical Co | Dalata Hotel vs. Vitec Software Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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