Correlation Between CompuGroup Medical and ELECTRONIC ARTS
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and ELECTRONIC ARTS 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 ELECTRONIC ARTS 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 ELECTRONIC ARTS, you can compare the effects of market volatilities on CompuGroup Medical and ELECTRONIC ARTS 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 ELECTRONIC ARTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and ELECTRONIC ARTS.
Diversification Opportunities for CompuGroup Medical and ELECTRONIC ARTS
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CompuGroup and ELECTRONIC is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS 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 ELECTRONIC ARTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECTRONIC ARTS has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and ELECTRONIC ARTS go up and down completely randomly.
Pair Corralation between CompuGroup Medical and ELECTRONIC ARTS
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to under-perform the ELECTRONIC ARTS. But the stock apears to be less risky and, when comparing its historical volatility, CompuGroup Medical SE is 1.55 times less risky than ELECTRONIC ARTS. The stock trades about -0.12 of its potential returns per unit of risk. The ELECTRONIC ARTS is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 11,006 in ELECTRONIC ARTS on November 28, 2024 and sell it today you would earn a total of 1,786 from holding ELECTRONIC ARTS or generate 16.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CompuGroup Medical SE vs. ELECTRONIC ARTS
Performance |
| Timeline |
| CompuGroup Medical |
| ELECTRONIC ARTS |
CompuGroup Medical and ELECTRONIC ARTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and ELECTRONIC ARTS
The main advantage of trading using opposite CompuGroup Medical and ELECTRONIC ARTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, ELECTRONIC ARTS 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 ELECTRONIC ARTS will offset losses from the drop in ELECTRONIC ARTS's long position.| CompuGroup Medical vs. SLIGRO FOOD GROUP | CompuGroup Medical vs. CDL INVESTMENT | CompuGroup Medical vs. Yunnan Water Investment | CompuGroup Medical vs. Investment AB Latour |
| ELECTRONIC ARTS vs. GOME Retail Holdings | ELECTRONIC ARTS vs. RETAIL FOOD GROUP | ELECTRONIC ARTS vs. DICKS Sporting Goods | ELECTRONIC ARTS vs. ANTA Sports Products |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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