Correlation Between Endeavour Mining and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining 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 Endeavour Mining and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endeavour Mining PLC and CompuGroup Medical SE, you can compare the effects of market volatilities on Endeavour Mining 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 Endeavour Mining with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and CompuGroup Medical.
Diversification Opportunities for Endeavour Mining and CompuGroup Medical
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Endeavour and CompuGroup is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Endeavour Mining 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 Endeavour Mining PLC 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 Endeavour Mining i.e., Endeavour Mining and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Endeavour Mining and CompuGroup Medical
Assuming the 90 days trading horizon Endeavour Mining PLC is expected to under-perform the CompuGroup Medical. But the stock apears to be less risky and, when comparing its historical volatility, Endeavour Mining PLC is 2.69 times less risky than CompuGroup Medical. The stock trades about -0.03 of its potential returns per unit of risk. The CompuGroup Medical SE is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,410 in CompuGroup Medical SE on October 16, 2024 and sell it today you would earn a total of 764.00 from holding CompuGroup Medical SE or generate 54.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Endeavour Mining PLC vs. CompuGroup Medical SE
Performance |
| Timeline |
| Endeavour Mining PLC |
| CompuGroup Medical |
Endeavour Mining and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and CompuGroup Medical
The main advantage of trading using opposite Endeavour Mining and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining 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.| Endeavour Mining vs. CITY OFFICE REIT | Endeavour Mining vs. Mitsui Chemicals | Endeavour Mining vs. Corporate Office Properties | Endeavour Mining vs. X FAB Silicon Foundries |
| CompuGroup Medical vs. CITY OFFICE REIT | CompuGroup Medical vs. GALENA MINING LTD | CompuGroup Medical vs. alstria office REIT AG | CompuGroup Medical vs. Endeavour Mining PLC |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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