Correlation Between Elmos Semiconductor and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and CompuGroup Medical 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 Elmos Semiconductor and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elmos Semiconductor SE and CompuGroup Medical AG, you can compare the effects of market volatilities on Elmos Semiconductor and CompuGroup Medical 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 Elmos Semiconductor with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and CompuGroup Medical.
Diversification Opportunities for Elmos Semiconductor and CompuGroup Medical
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elmos and CompuGroup is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and CompuGroup Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Elmos Semiconductor 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 Elmos Semiconductor SE are associated (or correlated) with CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and CompuGroup Medical
Assuming the 90 days trading horizon Elmos Semiconductor is expected to generate 1.51 times less return on investment than CompuGroup Medical. In addition to that, Elmos Semiconductor is 1.7 times more volatile than CompuGroup Medical AG. It trades about 0.08 of its total potential returns per unit of risk. CompuGroup Medical AG is currently generating about 0.2 per unit of volatility. If you would invest 1,411 in CompuGroup Medical AG on August 30, 2024 and sell it today you would earn a total of 149.00 from holding CompuGroup Medical AG or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. CompuGroup Medical AG
Performance |
| Timeline |
| Elmos Semiconductor |
| CompuGroup Medical |
Elmos Semiconductor and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and CompuGroup Medical
The main advantage of trading using opposite Elmos Semiconductor and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| Elmos Semiconductor vs. Lendinvest PLC | Elmos Semiconductor vs. Neometals | Elmos Semiconductor vs. Albion Technology General | Elmos Semiconductor vs. Jupiter Fund Management |
| CompuGroup Medical vs. Lendinvest PLC | CompuGroup Medical vs. Neometals | CompuGroup Medical vs. Albion Technology General | CompuGroup Medical vs. Jupiter Fund Management |
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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