Correlation Between Compugroup Medical and LIFEWAY FOODS
Can any of the company-specific risk be diversified away by investing in both Compugroup Medical and LIFEWAY FOODS 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 LIFEWAY FOODS 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 LIFEWAY FOODS, you can compare the effects of market volatilities on Compugroup Medical and LIFEWAY FOODS 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 LIFEWAY FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugroup Medical and LIFEWAY FOODS.
Diversification Opportunities for Compugroup Medical and LIFEWAY FOODS
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compugroup and LIFEWAY is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Compugroup Medical SE and LIFEWAY FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFEWAY FOODS 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 LIFEWAY FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFEWAY FOODS has no effect on the direction of Compugroup Medical i.e., Compugroup Medical and LIFEWAY FOODS go up and down completely randomly.
Pair Corralation between Compugroup Medical and LIFEWAY FOODS
Assuming the 90 days horizon Compugroup Medical SE is expected to under-perform the LIFEWAY FOODS. But the stock apears to be less risky and, when comparing its historical volatility, Compugroup Medical SE is 2.24 times less risky than LIFEWAY FOODS. The stock trades about -0.06 of its potential returns per unit of risk. The LIFEWAY FOODS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 595.00 in LIFEWAY FOODS on August 28, 2024 and sell it today you would earn a total of 1,645 from holding LIFEWAY FOODS or generate 276.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compugroup Medical SE vs. LIFEWAY FOODS
Performance |
| Timeline |
| Compugroup Medical |
| LIFEWAY FOODS |
Compugroup Medical and LIFEWAY FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compugroup Medical and LIFEWAY FOODS
The main advantage of trading using opposite Compugroup Medical and LIFEWAY FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugroup Medical position performs unexpectedly, LIFEWAY FOODS 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 LIFEWAY FOODS will offset losses from the drop in LIFEWAY FOODS's long position.| Compugroup Medical vs. ANTA SPORTS PRODUCT | Compugroup Medical vs. LG Display Co | Compugroup Medical vs. LGI Homes | Compugroup Medical vs. KB HOME |
| LIFEWAY FOODS vs. Microchip Technology Incorporated | LIFEWAY FOODS vs. DXC Technology Co | LIFEWAY FOODS vs. CapitaLand Investment Limited | LIFEWAY FOODS vs. MGIC INVESTMENT |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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