Correlation Between Motorcar Parts and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Motorcar Parts 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 Motorcar Parts and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Motorcar Parts of and CompuGroup Medical SE, you can compare the effects of market volatilities on Motorcar Parts 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 Motorcar Parts with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motorcar Parts and CompuGroup Medical.
Diversification Opportunities for Motorcar Parts and CompuGroup Medical
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Motorcar and CompuGroup is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Motorcar Parts of and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Motorcar Parts 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 Motorcar Parts of 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 Motorcar Parts i.e., Motorcar Parts and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Motorcar Parts and CompuGroup Medical
Assuming the 90 days horizon Motorcar Parts of is expected to generate 1.55 times more return on investment than CompuGroup Medical. However, Motorcar Parts is 1.55 times more volatile than CompuGroup Medical SE. It trades about 0.02 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about -0.03 per unit of risk. If you would invest 1,020 in Motorcar Parts of on November 28, 2024 and sell it today you would earn a total of 10.00 from holding Motorcar Parts of or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Motorcar Parts of vs. CompuGroup Medical SE
Performance |
| Timeline |
| Motorcar Parts |
| CompuGroup Medical |
Motorcar Parts and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Motorcar Parts and CompuGroup Medical
The main advantage of trading using opposite Motorcar Parts and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motorcar Parts 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.| Motorcar Parts vs. Skandinaviska Enskilda Banken | Motorcar Parts vs. Brixton Metals | Motorcar Parts vs. RCS Mediagroup SpA | Motorcar Parts vs. Repsol SA |
| CompuGroup Medical vs. SLIGRO FOOD GROUP | CompuGroup Medical vs. CDL INVESTMENT | CompuGroup Medical vs. Yunnan Water Investment | CompuGroup Medical vs. Investment AB Latour |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |