Correlation Between CompuGroup Medical and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on CompuGroup Medical and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and ELMOS SEMICONDUCTOR.
Diversification Opportunities for CompuGroup Medical and ELMOS SEMICONDUCTOR
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CompuGroup and ELMOS is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS 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 ELMOS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELMOS SEMICONDUCTOR has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between CompuGroup Medical and ELMOS SEMICONDUCTOR
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to generate 0.36 times more return on investment than ELMOS SEMICONDUCTOR. However, CompuGroup Medical SE is 2.79 times less risky than ELMOS SEMICONDUCTOR. It trades about 0.26 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about -0.13 per unit of risk. If you would invest 2,204 in CompuGroup Medical SE on November 6, 2024 and sell it today you would earn a total of 106.00 from holding CompuGroup Medical SE or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical SE vs. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| CompuGroup Medical |
| ELMOS SEMICONDUCTOR |
CompuGroup Medical and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite CompuGroup Medical and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR will offset losses from the drop in ELMOS SEMICONDUCTOR's long position.| CompuGroup Medical vs. AGNC INVESTMENT | CompuGroup Medical vs. Gladstone Investment | CompuGroup Medical vs. SEI INVESTMENTS | CompuGroup Medical vs. Minerals Technologies |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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