Correlation Between MEDICAL FACILITIES and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES 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 MEDICAL FACILITIES and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICAL FACILITIES NEW and CompuGroup Medical SE, you can compare the effects of market volatilities on MEDICAL FACILITIES 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 MEDICAL FACILITIES with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and CompuGroup Medical.
Diversification Opportunities for MEDICAL FACILITIES and CompuGroup Medical
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between MEDICAL and CompuGroup is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW 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 MEDICAL FACILITIES i.e., MEDICAL FACILITIES and CompuGroup Medical go up and down completely randomly.
Pair Corralation between MEDICAL FACILITIES and CompuGroup Medical
Assuming the 90 days horizon MEDICAL FACILITIES NEW is expected to generate 0.87 times more return on investment than CompuGroup Medical. However, MEDICAL FACILITIES NEW is 1.15 times less risky than CompuGroup Medical. It trades about 0.23 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about 0.12 per unit of risk. If you would invest 960.00 in MEDICAL FACILITIES NEW on August 29, 2024 and sell it today you would earn a total of 120.00 from holding MEDICAL FACILITIES NEW or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDICAL FACILITIES NEW vs. CompuGroup Medical SE
Performance |
| Timeline |
| MEDICAL FACILITIES NEW |
| CompuGroup Medical |
MEDICAL FACILITIES and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICAL FACILITIES and CompuGroup Medical
The main advantage of trading using opposite MEDICAL FACILITIES and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES 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.| MEDICAL FACILITIES vs. Ramsay Health Care | MEDICAL FACILITIES vs. Superior Plus Corp | MEDICAL FACILITIES vs. NMI Holdings | MEDICAL FACILITIES vs. Origin Agritech |
| CompuGroup Medical vs. Superior Plus Corp | CompuGroup Medical vs. NMI Holdings | CompuGroup Medical vs. Origin Agritech | CompuGroup Medical vs. SIVERS SEMICONDUCTORS AB |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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