Correlation Between Compugroup Medical and China Resources
Can any of the company-specific risk be diversified away by investing in both Compugroup Medical and China Resources 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 China Resources 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 China Resources Land, you can compare the effects of market volatilities on Compugroup Medical and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugroup Medical and China Resources.
Diversification Opportunities for Compugroup Medical and China Resources
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compugroup and China is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Compugroup Medical SE and China Resources Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Land 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Land has no effect on the direction of Compugroup Medical i.e., Compugroup Medical and China Resources go up and down completely randomly.
Pair Corralation between Compugroup Medical and China Resources
Assuming the 90 days horizon Compugroup Medical SE is expected to under-perform the China Resources. But the stock apears to be less risky and, when comparing its historical volatility, Compugroup Medical SE is 1.46 times less risky than China Resources. The stock trades about -0.02 of its potential returns per unit of risk. The China Resources Land is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 148.00 in China Resources Land on September 25, 2024 and sell it today you would earn a total of 122.00 from holding China Resources Land or generate 82.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compugroup Medical SE vs. China Resources Land
Performance |
| Timeline |
| Compugroup Medical |
| China Resources Land |
Compugroup Medical and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compugroup Medical and China Resources
The main advantage of trading using opposite Compugroup Medical and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugroup Medical position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Compugroup Medical vs. Veeva Systems | Compugroup Medical vs. 10X GENOMICS DL | Compugroup Medical vs. Healthequity | Compugroup Medical vs. Teladoc |
| China Resources vs. Fukuyama Transporting Co | China Resources vs. SPORT LISBOA E | China Resources vs. Gaztransport Technigaz SA | China Resources vs. Compugroup Medical SE |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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