Correlation Between CompuGroup Medical and Gentex
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Gentex 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 Gentex 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 Gentex, you can compare the effects of market volatilities on CompuGroup Medical and Gentex 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 Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Gentex.
Diversification Opportunities for CompuGroup Medical and Gentex
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CompuGroup and Gentex is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Gentex go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Gentex
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to generate 0.32 times more return on investment than Gentex. However, CompuGroup Medical SE is 3.17 times less risky than Gentex. It trades about 0.31 of its potential returns per unit of risk. Gentex is currently generating about -0.59 per unit of risk. If you would invest 2,162 in CompuGroup Medical SE on October 13, 2024 and sell it today you would earn a total of 32.00 from holding CompuGroup Medical SE or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical SE vs. Gentex
Performance |
| Timeline |
| CompuGroup Medical |
| Gentex |
CompuGroup Medical and Gentex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Gentex
The main advantage of trading using opposite CompuGroup Medical and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.| CompuGroup Medical vs. HOCHSCHILD MINING | CompuGroup Medical vs. Molson Coors Beverage | CompuGroup Medical vs. The Boston Beer | CompuGroup Medical vs. Media and Games |
| Gentex vs. Gladstone Investment | Gentex vs. Air Transport Services | Gentex vs. ECHO INVESTMENT ZY | Gentex vs. BROADWIND ENRGY |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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