Correlation Between Compugroup Medical and Pick N
Can any of the company-specific risk be diversified away by investing in both Compugroup Medical and Pick N 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 Pick N 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 Pick n Pay, you can compare the effects of market volatilities on Compugroup Medical and Pick N 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 Pick N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugroup Medical and Pick N.
Diversification Opportunities for Compugroup Medical and Pick N
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Compugroup and Pick is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Compugroup Medical SE and Pick n Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pick n Pay 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 Pick N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pick n Pay has no effect on the direction of Compugroup Medical i.e., Compugroup Medical and Pick N go up and down completely randomly.
Pair Corralation between Compugroup Medical and Pick N
Assuming the 90 days horizon Compugroup Medical is expected to generate 1.5 times less return on investment than Pick N. But when comparing it to its historical volatility, Compugroup Medical SE is 4.54 times less risky than Pick N. It trades about 0.22 of its potential returns per unit of risk. Pick n Pay is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 157.00 in Pick n Pay on October 24, 2024 and sell it today you would earn a total of 4.00 from holding Pick n Pay or generate 2.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 94.44% |
Values | Daily Returns |
Compugroup Medical SE vs. Pick n Pay
Performance |
Timeline |
Compugroup Medical |
Pick n Pay |
Compugroup Medical and Pick N Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Compugroup Medical and Pick N
The main advantage of trading using opposite Compugroup Medical and Pick N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugroup Medical position performs unexpectedly, Pick N 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 Pick N will offset losses from the drop in Pick N's long position.Compugroup Medical vs. Evolent Health | Compugroup Medical vs. CompuGroup Medical SE | Compugroup Medical vs. Superior Plus Corp | Compugroup Medical vs. Intel |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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