Correlation Between Odfjell Drilling and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Odfjell Drilling 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 Odfjell Drilling and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell Drilling and CompuGroup Medical AG, you can compare the effects of market volatilities on Odfjell Drilling 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 Odfjell Drilling with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell Drilling and CompuGroup Medical.
Diversification Opportunities for Odfjell Drilling and CompuGroup Medical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Odfjell and CompuGroup is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell Drilling and CompuGroup Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Odfjell Drilling 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 Odfjell Drilling 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 Odfjell Drilling i.e., Odfjell Drilling and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Odfjell Drilling and CompuGroup Medical
Assuming the 90 days trading horizon Odfjell Drilling is expected to generate 0.69 times more return on investment than CompuGroup Medical. However, Odfjell Drilling is 1.45 times less risky than CompuGroup Medical. It trades about 0.1 of its potential returns per unit of risk. CompuGroup Medical AG is currently generating about -0.1 per unit of risk. If you would invest 3,280 in Odfjell Drilling on August 27, 2024 and sell it today you would earn a total of 1,838 from holding Odfjell Drilling or generate 56.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Odfjell Drilling vs. CompuGroup Medical AG
Performance |
| Timeline |
| Odfjell Drilling |
| CompuGroup Medical |
Odfjell Drilling and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odfjell Drilling and CompuGroup Medical
The main advantage of trading using opposite Odfjell Drilling and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell Drilling 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.| Odfjell Drilling vs. Greenroc Mining PLC | Odfjell Drilling vs. Lundin Mining Corp | Odfjell Drilling vs. Thor Mining PLC | Odfjell Drilling vs. Compagnie Plastic Omnium |
| CompuGroup Medical vs. Samsung Electronics Co | CompuGroup Medical vs. Samsung Electronics Co | CompuGroup Medical vs. Hyundai Motor | CompuGroup Medical vs. Toyota Motor Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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