Correlation Between CompuGroup Medical and SEI Investments
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and SEI Investments 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 SEI Investments 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 SEI Investments, you can compare the effects of market volatilities on CompuGroup Medical and SEI Investments 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 SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and SEI Investments.
Diversification Opportunities for CompuGroup Medical and SEI Investments
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CompuGroup and SEI is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments 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 SEI Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Investments has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and SEI Investments go up and down completely randomly.
Pair Corralation between CompuGroup Medical and SEI Investments
Assuming the 90 days horizon CompuGroup Medical SE is expected to generate 4.68 times more return on investment than SEI Investments. However, CompuGroup Medical is 4.68 times more volatile than SEI Investments. It trades about 0.21 of its potential returns per unit of risk. SEI Investments is currently generating about 0.2 per unit of risk. If you would invest 1,804 in CompuGroup Medical SE on November 4, 2024 and sell it today you would earn a total of 571.00 from holding CompuGroup Medical SE or generate 31.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
CompuGroup Medical SE vs. SEI Investments
Performance |
| Timeline |
| CompuGroup Medical |
| SEI Investments |
CompuGroup Medical and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and SEI Investments
The main advantage of trading using opposite CompuGroup Medical and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, SEI Investments 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 SEI Investments will offset losses from the drop in SEI Investments' long position.| CompuGroup Medical vs. Vulcan Materials | CompuGroup Medical vs. ZhongAn Online P | CompuGroup Medical vs. BOS Better Online | CompuGroup Medical vs. Magnite |
| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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