Correlation Between Compugroup Medical and Gossan Resources
Can any of the company-specific risk be diversified away by investing in both Compugroup Medical and Gossan 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 Gossan 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 Gossan Resources, you can compare the effects of market volatilities on Compugroup Medical and Gossan 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 Gossan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugroup Medical and Gossan Resources.
Diversification Opportunities for Compugroup Medical and Gossan Resources
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compugroup and Gossan is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Compugroup Medical SE and Gossan Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gossan Resources 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 Gossan Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gossan Resources has no effect on the direction of Compugroup Medical i.e., Compugroup Medical and Gossan Resources go up and down completely randomly.
Pair Corralation between Compugroup Medical and Gossan Resources
Assuming the 90 days horizon Compugroup Medical is expected to generate 38.28 times less return on investment than Gossan Resources. But when comparing it to its historical volatility, Compugroup Medical SE is 67.6 times less risky than Gossan Resources. It trades about 0.37 of its potential returns per unit of risk. Gossan Resources is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 0.40 in Gossan Resources on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Gossan Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Compugroup Medical SE vs. Gossan Resources
Performance |
| Timeline |
| Compugroup Medical |
| Gossan Resources |
Compugroup Medical and Gossan Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compugroup Medical and Gossan Resources
The main advantage of trading using opposite Compugroup Medical and Gossan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugroup Medical position performs unexpectedly, Gossan 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 Gossan Resources will offset losses from the drop in Gossan Resources' long position.| Compugroup Medical vs. TRADEGATE | Compugroup Medical vs. PT Steel Pipe | Compugroup Medical vs. The Japan Steel | Compugroup Medical vs. CANON MARKETING JP |
| Gossan Resources vs. Indutrade AB | Gossan Resources vs. Samsung Electronics Co | Gossan Resources vs. Richardson Electronics | Gossan Resources vs. The Trade Desk |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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