Correlation Between CullenFrost Bankers and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both CullenFrost Bankers 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 CullenFrost Bankers and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CullenFrost Bankers and CompuGroup Medical SE, you can compare the effects of market volatilities on CullenFrost Bankers 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 CullenFrost Bankers with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CullenFrost Bankers and CompuGroup Medical.
Diversification Opportunities for CullenFrost Bankers and CompuGroup Medical
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CullenFrost and CompuGroup is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CullenFrost Bankers and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and CullenFrost Bankers 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 CullenFrost Bankers 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 CullenFrost Bankers i.e., CullenFrost Bankers and CompuGroup Medical go up and down completely randomly.
Pair Corralation between CullenFrost Bankers and CompuGroup Medical
Assuming the 90 days horizon CullenFrost Bankers is expected to generate 1.36 times less return on investment than CompuGroup Medical. But when comparing it to its historical volatility, CullenFrost Bankers is 1.95 times less risky than CompuGroup Medical. It trades about 0.16 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,533 in CompuGroup Medical SE on November 4, 2024 and sell it today you would earn a total of 777.00 from holding CompuGroup Medical SE or generate 50.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CullenFrost Bankers vs. CompuGroup Medical SE
Performance |
| Timeline |
| CullenFrost Bankers |
| CompuGroup Medical |
CullenFrost Bankers and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CullenFrost Bankers and CompuGroup Medical
The main advantage of trading using opposite CullenFrost Bankers and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CullenFrost Bankers 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.| CullenFrost Bankers vs. AOI Electronics Co | CullenFrost Bankers vs. BJs Wholesale Club | CullenFrost Bankers vs. STMICROELECTRONICS | CullenFrost Bankers vs. Caseys General Stores |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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