Correlation Between CompuGroup Medical and AVITA Medical
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and AVITA Medical 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 AVITA Medical 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 AVITA Medical, you can compare the effects of market volatilities on CompuGroup Medical and AVITA Medical 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 AVITA Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and AVITA Medical.
Diversification Opportunities for CompuGroup Medical and AVITA Medical
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CompuGroup and AVITA is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and AVITA Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVITA Medical 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 AVITA Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVITA Medical has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and AVITA Medical go up and down completely randomly.
Pair Corralation between CompuGroup Medical and AVITA Medical
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to under-perform the AVITA Medical. But the stock apears to be less risky and, when comparing its historical volatility, CompuGroup Medical SE is 1.04 times less risky than AVITA Medical. The stock trades about -0.1 of its potential returns per unit of risk. The AVITA Medical is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 163.00 in AVITA Medical on September 2, 2024 and sell it today you would earn a total of 77.00 from holding AVITA Medical or generate 47.24% 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. AVITA Medical
Performance |
| Timeline |
| CompuGroup Medical |
| AVITA Medical |
CompuGroup Medical and AVITA Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and AVITA Medical
The main advantage of trading using opposite CompuGroup Medical and AVITA Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, AVITA Medical 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 AVITA Medical will offset losses from the drop in AVITA Medical's long position.| CompuGroup Medical vs. CARSALESCOM | CompuGroup Medical vs. INTER CARS SA | CompuGroup Medical vs. CarsalesCom | CompuGroup Medical vs. Geely Automobile Holdings |
| AVITA Medical vs. CECO ENVIRONMENTAL | AVITA Medical vs. MITSUBISHI STEEL MFG | AVITA Medical vs. SBI Insurance Group | AVITA Medical vs. BLUESCOPE STEEL |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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