Correlation Between CompuGroup Medical and HK Electric
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and HK Electric 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 HK Electric 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 HK Electric Investments, you can compare the effects of market volatilities on CompuGroup Medical and HK Electric 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 HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and HK Electric.
Diversification Opportunities for CompuGroup Medical and HK Electric
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CompuGroup and HKT is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric Investments 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 HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and HK Electric go up and down completely randomly.
Pair Corralation between CompuGroup Medical and HK Electric
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to under-perform the HK Electric. In addition to that, CompuGroup Medical is 1.28 times more volatile than HK Electric Investments. It trades about -0.12 of its total potential returns per unit of risk. HK Electric Investments is currently generating about 0.08 per unit of volatility. If you would invest 64.00 in HK Electric Investments on November 28, 2024 and sell it today you would earn a total of 1.00 from holding HK Electric Investments or generate 1.56% 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. HK Electric Investments
Performance |
| Timeline |
| CompuGroup Medical |
| HK Electric Investments |
CompuGroup Medical and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and HK Electric
The main advantage of trading using opposite CompuGroup Medical and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric'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 |
| HK Electric vs. Coeur Mining | HK Electric vs. Spirent Communications plc | HK Electric vs. COMBA TELECOM SYST | HK Electric vs. Singapore Telecommunications Limited |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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