Correlation Between Compugroup Medical and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Compugroup Medical and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on Compugroup Medical and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugroup Medical and Ross Stores.
Diversification Opportunities for Compugroup Medical and Ross Stores
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compugroup and Ross is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Compugroup Medical SE and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Compugroup Medical i.e., Compugroup Medical and Ross Stores go up and down completely randomly.
Pair Corralation between Compugroup Medical and Ross Stores
Assuming the 90 days horizon Compugroup Medical SE is expected to generate 0.79 times more return on investment than Ross Stores. However, Compugroup Medical SE is 1.27 times less risky than Ross Stores. It trades about 0.23 of its potential returns per unit of risk. Ross Stores is currently generating about -0.22 per unit of risk. If you would invest 2,196 in Compugroup Medical SE on November 7, 2024 and sell it today you would earn a total of 108.00 from holding Compugroup Medical SE or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compugroup Medical SE vs. Ross Stores
Performance |
| Timeline |
| Compugroup Medical |
| Ross Stores |
Compugroup Medical and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compugroup Medical and Ross Stores
The main advantage of trading using opposite Compugroup Medical and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugroup Medical position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Compugroup Medical vs. BJs Wholesale Club | Compugroup Medical vs. KENEDIX OFFICE INV | Compugroup Medical vs. RCS MediaGroup SpA | Compugroup Medical vs. Nexstar Media Group |
| Ross Stores vs. CITIC Telecom International | Ross Stores vs. China Communications Services | Ross Stores vs. Citic Telecom International | Ross Stores vs. Mitsui Chemicals |
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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