Correlation Between AUSNUTRIA DAIRY and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUSNUTRIA DAIRY and CompuGroup Medical SE, you can compare the effects of market volatilities on AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSNUTRIA DAIRY and CompuGroup Medical.
Diversification Opportunities for AUSNUTRIA DAIRY and CompuGroup Medical
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AUSNUTRIA and CompuGroup is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding AUSNUTRIA DAIRY and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY i.e., AUSNUTRIA DAIRY and CompuGroup Medical go up and down completely randomly.
Pair Corralation between AUSNUTRIA DAIRY and CompuGroup Medical
Assuming the 90 days trading horizon AUSNUTRIA DAIRY is expected to under-perform the CompuGroup Medical. But the stock apears to be less risky and, when comparing its historical volatility, AUSNUTRIA DAIRY is 2.01 times less risky than CompuGroup Medical. The stock trades about -0.14 of its potential returns per unit of risk. The CompuGroup Medical SE is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,498 in CompuGroup Medical SE on September 24, 2024 and sell it today you would earn a total of 676.00 from holding CompuGroup Medical SE or generate 45.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUSNUTRIA DAIRY vs. CompuGroup Medical SE
Performance |
| Timeline |
| AUSNUTRIA DAIRY |
| CompuGroup Medical |
AUSNUTRIA DAIRY and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUSNUTRIA DAIRY and CompuGroup Medical
The main advantage of trading using opposite AUSNUTRIA DAIRY and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUSNUTRIA DAIRY 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.| AUSNUTRIA DAIRY vs. Apple Inc | AUSNUTRIA DAIRY vs. Apple Inc | AUSNUTRIA DAIRY vs. Apple Inc | AUSNUTRIA DAIRY vs. Microsoft |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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