Correlation Between CompuGroup Medical and Unite Group
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Unite Group 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 Unite Group 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 Unite Group PLC, you can compare the effects of market volatilities on CompuGroup Medical and Unite Group 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 Unite Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Unite Group.
Diversification Opportunities for CompuGroup Medical and Unite Group
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompuGroup and Unite is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Unite Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unite Group PLC 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 Unite Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unite Group PLC has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Unite Group go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Unite Group
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to under-perform the Unite Group. In addition to that, CompuGroup Medical is 1.81 times more volatile than Unite Group PLC. It trades about -0.05 of its total potential returns per unit of risk. Unite Group PLC is currently generating about 0.0 per unit of volatility. If you would invest 86,999 in Unite Group PLC on September 5, 2024 and sell it today you would lose (1,349) from holding Unite Group PLC or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Unite Group PLC
Performance |
| Timeline |
| CompuGroup Medical |
| Unite Group PLC |
CompuGroup Medical and Unite Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Unite Group
The main advantage of trading using opposite CompuGroup Medical and Unite Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Unite Group 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 Unite Group will offset losses from the drop in Unite Group's long position.| CompuGroup Medical vs. Monster Beverage Corp | CompuGroup Medical vs. Albion Technology General | CompuGroup Medical vs. X FAB Silicon Foundries | CompuGroup Medical vs. Sabien Technology Group |
| Unite Group vs. Datalogic | Unite Group vs. Playtech Plc | Unite Group vs. Teradata Corp | Unite Group vs. CompuGroup Medical AG |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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