Correlation Between CompuGroup Medical and Federal Agricultural
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Federal Agricultural 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 Federal Agricultural 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 Federal Agricultural Mortgage, you can compare the effects of market volatilities on CompuGroup Medical and Federal Agricultural 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 Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Federal Agricultural.
Diversification Opportunities for CompuGroup Medical and Federal Agricultural
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CompuGroup and Federal is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural 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 Federal Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Agricultural has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Federal Agricultural go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Federal Agricultural
Assuming the 90 days trading horizon CompuGroup Medical is expected to generate 1.17 times less return on investment than Federal Agricultural. But when comparing it to its historical volatility, CompuGroup Medical SE is 1.16 times less risky than Federal Agricultural. It trades about 0.25 of its potential returns per unit of risk. Federal Agricultural Mortgage is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 17,100 in Federal Agricultural Mortgage on August 31, 2024 and sell it today you would earn a total of 2,900 from holding Federal Agricultural Mortgage or generate 16.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CompuGroup Medical SE vs. Federal Agricultural Mortgage
Performance |
| Timeline |
| CompuGroup Medical |
| Federal Agricultural |
CompuGroup Medical and Federal Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Federal Agricultural
The main advantage of trading using opposite CompuGroup Medical and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Federal Agricultural 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 Federal Agricultural will offset losses from the drop in Federal Agricultural's long position.| CompuGroup Medical vs. Superior Plus Corp | CompuGroup Medical vs. NMI Holdings | CompuGroup Medical vs. Origin Agritech | CompuGroup Medical vs. SIVERS SEMICONDUCTORS AB |
| Federal Agricultural vs. Mastercard | Federal Agricultural vs. Capital One Financial | Federal Agricultural vs. ORIX Corporation |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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