Correlation Between CompuGroup Medical and Eisai Co
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Eisai Co 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 Eisai Co 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 Eisai Co, you can compare the effects of market volatilities on CompuGroup Medical and Eisai Co 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 Eisai Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Eisai Co.
Diversification Opportunities for CompuGroup Medical and Eisai Co
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompuGroup and Eisai is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Eisai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eisai Co 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 Eisai Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eisai Co has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Eisai Co go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Eisai Co
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to under-perform the Eisai Co. In addition to that, CompuGroup Medical is 1.2 times more volatile than Eisai Co. It trades about -0.08 of its total potential returns per unit of risk. Eisai Co is currently generating about -0.06 per unit of volatility. If you would invest 5,128 in Eisai Co on September 4, 2024 and sell it today you would lose (2,123) from holding Eisai Co or give up 41.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
CompuGroup Medical SE vs. Eisai Co
Performance |
| Timeline |
| CompuGroup Medical |
| Eisai Co |
CompuGroup Medical and Eisai Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Eisai Co
The main advantage of trading using opposite CompuGroup Medical and Eisai Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Eisai Co 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 Eisai Co will offset losses from the drop in Eisai Co's long position.| CompuGroup Medical vs. ZURICH INSURANCE GROUP | CompuGroup Medical vs. LION ONE METALS | CompuGroup Medical vs. Singapore Reinsurance | CompuGroup Medical vs. REVO INSURANCE SPA |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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