Correlation Between CompuGroup Medical and Haier Smart
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Haier Smart 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 Haier Smart 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 Haier Smart Home, you can compare the effects of market volatilities on CompuGroup Medical and Haier Smart 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 Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Haier Smart.
Diversification Opportunities for CompuGroup Medical and Haier Smart
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CompuGroup and Haier is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home 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 Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Haier Smart go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Haier Smart
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to under-perform the Haier Smart. In addition to that, CompuGroup Medical is 1.98 times more volatile than Haier Smart Home. It trades about -0.03 of its total potential returns per unit of risk. Haier Smart Home is currently generating about 0.12 per unit of volatility. If you would invest 103.00 in Haier Smart Home on September 12, 2024 and sell it today you would earn a total of 68.00 from holding Haier Smart Home or generate 66.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical SE vs. Haier Smart Home
Performance |
| Timeline |
| CompuGroup Medical |
| Haier Smart Home |
CompuGroup Medical and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Haier Smart
The main advantage of trading using opposite CompuGroup Medical and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.| CompuGroup Medical vs. Evolent Health | CompuGroup Medical vs. Compugroup Medical SE | CompuGroup Medical vs. Superior Plus Corp | CompuGroup Medical vs. NMI Holdings |
| Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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