Correlation Between Hua Hong and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Hua Hong 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 Hua Hong and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and CompuGroup Medical SE, you can compare the effects of market volatilities on Hua Hong 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 Hua Hong with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and CompuGroup Medical.
Diversification Opportunities for Hua Hong and CompuGroup Medical
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hua and CompuGroup is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Hua Hong 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 Hua Hong Semiconductor 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 Hua Hong i.e., Hua Hong and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Hua Hong and CompuGroup Medical
Assuming the 90 days horizon Hua Hong Semiconductor is expected to generate 3.24 times more return on investment than CompuGroup Medical. However, Hua Hong is 3.24 times more volatile than CompuGroup Medical SE. It trades about 0.21 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about 0.29 per unit of risk. If you would invest 248.00 in Hua Hong Semiconductor on November 4, 2024 and sell it today you would earn a total of 32.00 from holding Hua Hong Semiconductor or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. CompuGroup Medical SE
Performance |
| Timeline |
| Hua Hong Semiconductor |
| CompuGroup Medical |
Hua Hong and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and CompuGroup Medical
The main advantage of trading using opposite Hua Hong and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong 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.| Hua Hong vs. PLAYMATES TOYS | Hua Hong vs. QINGCI GAMES INC | Hua Hong vs. Tower Semiconductor | Hua Hong vs. ON SEMICONDUCTOR |
| CompuGroup Medical vs. Tower One Wireless | CompuGroup Medical vs. Spirent Communications plc | CompuGroup Medical vs. SILVER BULLET DATA | CompuGroup Medical vs. Teradata 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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