Correlation Between CompuGroup Medical and First Ship
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and First Ship 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 CompuGroup Medical and First Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompuGroup Medical SE and First Ship Lease, you can compare the effects of market volatilities on CompuGroup Medical and First Ship 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 CompuGroup Medical with a short position of First Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and First Ship.
Diversification Opportunities for CompuGroup Medical and First Ship
-1.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CompuGroup and First is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and First Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ship Lease and CompuGroup Medical 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 CompuGroup Medical SE are associated (or correlated) with First Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ship Lease has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and First Ship go up and down completely randomly.
Pair Corralation between CompuGroup Medical and First Ship
Assuming the 90 days horizon CompuGroup Medical SE is expected to under-perform the First Ship. But the pink sheet apears to be less risky and, when comparing its historical volatility, CompuGroup Medical SE is 1.18 times less risky than First Ship. The pink sheet trades about -0.09 of its potential returns per unit of risk. The First Ship Lease is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.50 in First Ship Lease on September 14, 2024 and sell it today you would earn a total of 1.50 from holding First Ship Lease or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Strong |
| Accuracy | 69.89% |
| Values | Daily Returns |
CompuGroup Medical SE vs. First Ship Lease
Performance |
| Timeline |
| CompuGroup Medical |
| First Ship Lease |
CompuGroup Medical and First Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and First Ship
The main advantage of trading using opposite CompuGroup Medical and First Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, First Ship 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 First Ship will offset losses from the drop in First Ship's long position.| CompuGroup Medical vs. First Ship Lease | CompuGroup Medical vs. Air Lease | CompuGroup Medical vs. ATRenew Inc DRC | CompuGroup Medical vs. Coupang LLC |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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