Correlation Between Cannae Holdings and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Cannae Holdings 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 Cannae Holdings and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannae Holdings and CompuGroup Medical SE, you can compare the effects of market volatilities on Cannae Holdings 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 Cannae Holdings with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannae Holdings and CompuGroup Medical.
Diversification Opportunities for Cannae Holdings and CompuGroup Medical
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cannae and CompuGroup is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cannae Holdings and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Cannae Holdings 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 Cannae Holdings 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 Cannae Holdings i.e., Cannae Holdings and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Cannae Holdings and CompuGroup Medical
Given the investment horizon of 90 days Cannae Holdings is expected to generate 70.35 times less return on investment than CompuGroup Medical. But when comparing it to its historical volatility, Cannae Holdings is 7.65 times less risky than CompuGroup Medical. It trades about 0.03 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,449 in CompuGroup Medical SE on September 15, 2024 and sell it today you would earn a total of 861.00 from holding CompuGroup Medical SE or generate 59.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cannae Holdings vs. CompuGroup Medical SE
Performance |
| Timeline |
| Cannae Holdings |
| CompuGroup Medical |
Cannae Holdings and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cannae Holdings and CompuGroup Medical
The main advantage of trading using opposite Cannae Holdings and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannae Holdings 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.| Cannae Holdings vs. Brightsphere Investment Group | Cannae Holdings vs. Adtalem Global Education | Cannae Holdings vs. ConnectOne Bancorp | Cannae Holdings vs. Aquagold International |
| CompuGroup Medical vs. Lion One Metals | CompuGroup Medical vs. Sandstorm Gold Ltd | CompuGroup Medical vs. Cannae Holdings | CompuGroup Medical vs. Dine Brands Global |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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