Correlation Between CompuGroup Medical and InterContinental
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and InterContinental 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 InterContinental 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 InterContinental Hotels Group, you can compare the effects of market volatilities on CompuGroup Medical and InterContinental 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 InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and InterContinental.
Diversification Opportunities for CompuGroup Medical and InterContinental
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompuGroup and InterContinental is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels 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 InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and InterContinental go up and down completely randomly.
Pair Corralation between CompuGroup Medical and InterContinental
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to under-perform the InterContinental. In addition to that, CompuGroup Medical is 2.49 times more volatile than InterContinental Hotels Group. It trades about -0.11 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.16 per unit of volatility. If you would invest 600,284 in InterContinental Hotels Group on August 24, 2024 and sell it today you would earn a total of 364,116 from holding InterContinental Hotels Group or generate 60.66% 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. InterContinental Hotels Group
Performance |
| Timeline |
| CompuGroup Medical |
| InterContinental Hotels |
CompuGroup Medical and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and InterContinental
The main advantage of trading using opposite CompuGroup Medical and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, InterContinental 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 InterContinental will offset losses from the drop in InterContinental's long position.| CompuGroup Medical vs. Quadrise Plc | CompuGroup Medical vs. Intuitive Investments Group | CompuGroup Medical vs. European Metals Holdings | CompuGroup Medical vs. Athelney Trust plc |
| InterContinental vs. Toyota Motor Corp | InterContinental vs. SoftBank Group Corp | InterContinental vs. State Bank of | InterContinental vs. Freddie Mac |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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