Correlation Between CompuGroup Medical and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Liontrust Asset 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 Liontrust Asset 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 Liontrust Asset Management, you can compare the effects of market volatilities on CompuGroup Medical and Liontrust Asset 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 Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Liontrust Asset.
Diversification Opportunities for CompuGroup Medical and Liontrust Asset
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CompuGroup and Liontrust is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana 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 Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Liontrust Asset go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Liontrust Asset
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to under-perform the Liontrust Asset. In addition to that, CompuGroup Medical is 1.06 times more volatile than Liontrust Asset Management. It trades about -0.05 of its total potential returns per unit of risk. Liontrust Asset Management is currently generating about -0.04 per unit of volatility. If you would invest 86,476 in Liontrust Asset Management on August 30, 2024 and sell it today you would lose (40,076) from holding Liontrust Asset Management or give up 46.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Liontrust Asset Management
Performance |
| Timeline |
| CompuGroup Medical |
| Liontrust Asset Mana |
CompuGroup Medical and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Liontrust Asset
The main advantage of trading using opposite CompuGroup Medical and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Liontrust Asset 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 Liontrust Asset will offset losses from the drop in Liontrust Asset's long position.| CompuGroup Medical vs. Lendinvest PLC | CompuGroup Medical vs. Neometals | CompuGroup Medical vs. Albion Technology General | CompuGroup Medical vs. Jupiter Fund Management |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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