Correlation Between Compugroup Medical and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Compugroup Medical and Westinghouse Air 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 Westinghouse Air 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 Westinghouse Air Brake, you can compare the effects of market volatilities on Compugroup Medical and Westinghouse Air 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 Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugroup Medical and Westinghouse Air.
Diversification Opportunities for Compugroup Medical and Westinghouse Air
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Compugroup and Westinghouse is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Compugroup Medical SE and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake 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 Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of Compugroup Medical i.e., Compugroup Medical and Westinghouse Air go up and down completely randomly.
Pair Corralation between Compugroup Medical and Westinghouse Air
Assuming the 90 days horizon Compugroup Medical is expected to generate 3.27 times less return on investment than Westinghouse Air. But when comparing it to its historical volatility, Compugroup Medical SE is 1.8 times less risky than Westinghouse Air. It trades about 0.22 of its potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 18,450 in Westinghouse Air Brake on October 24, 2024 and sell it today you would earn a total of 1,135 from holding Westinghouse Air Brake or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compugroup Medical SE vs. Westinghouse Air Brake
Performance |
| Timeline |
| Compugroup Medical |
| Westinghouse Air Brake |
Compugroup Medical and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compugroup Medical and Westinghouse Air
The main advantage of trading using opposite Compugroup Medical and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugroup Medical position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air's long position.| Compugroup Medical vs. Evolent Health | Compugroup Medical vs. CompuGroup Medical SE | Compugroup Medical vs. Superior Plus Corp | Compugroup Medical vs. Intel |
| Westinghouse Air vs. COLUMBIA SPORTSWEAR | Westinghouse Air vs. Adtalem Global Education | Westinghouse Air vs. PLAYTIKA HOLDING DL 01 | Westinghouse Air vs. DeVry Education Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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