Correlation Between CompuGroup Medical and Hua Hong
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Hua Hong 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 Hua Hong 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 Hua Hong Semiconductor, you can compare the effects of market volatilities on CompuGroup Medical and Hua Hong 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 Hua Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Hua Hong.
Diversification Opportunities for CompuGroup Medical and Hua Hong
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CompuGroup and Hua is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Hua Hong Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Hong Semiconductor 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 Hua Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Hong Semiconductor has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Hua Hong go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Hua Hong
Assuming the 90 days trading horizon CompuGroup Medical is expected to generate 2.4 times less return on investment than Hua Hong. But when comparing it to its historical volatility, CompuGroup Medical SE is 3.24 times less risky than Hua Hong. It trades about 0.29 of its potential returns per unit of risk. Hua Hong Semiconductor is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 248.00 in Hua Hong Semiconductor on November 4, 2024 and sell it today you would earn a total of 32.00 from holding Hua Hong Semiconductor or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical SE vs. Hua Hong Semiconductor
Performance |
| Timeline |
| CompuGroup Medical |
| Hua Hong Semiconductor |
CompuGroup Medical and Hua Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Hua Hong
The main advantage of trading using opposite CompuGroup Medical and Hua Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Hua Hong 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 Hua Hong will offset losses from the drop in Hua Hong's long position.| CompuGroup Medical vs. Tower One Wireless | CompuGroup Medical vs. Spirent Communications plc | CompuGroup Medical vs. SILVER BULLET DATA | CompuGroup Medical vs. Teradata Corp |
| Hua Hong vs. PLAYMATES TOYS | Hua Hong vs. QINGCI GAMES INC | Hua Hong vs. Tower Semiconductor | Hua Hong vs. ON SEMICONDUCTOR |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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