Correlation Between CompuGroup Medical and MELIA HOTELS
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and MELIA HOTELS 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 MELIA HOTELS 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 MELIA HOTELS, you can compare the effects of market volatilities on CompuGroup Medical and MELIA HOTELS 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 MELIA HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and MELIA HOTELS.
Diversification Opportunities for CompuGroup Medical and MELIA HOTELS
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CompuGroup and MELIA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and MELIA HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MELIA HOTELS 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 MELIA HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MELIA HOTELS has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and MELIA HOTELS go up and down completely randomly.
Pair Corralation between CompuGroup Medical and MELIA HOTELS
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to generate 0.28 times more return on investment than MELIA HOTELS. However, CompuGroup Medical SE is 3.62 times less risky than MELIA HOTELS. It trades about 0.29 of its potential returns per unit of risk. MELIA HOTELS is currently generating about -0.17 per unit of risk. If you would invest 2,176 in CompuGroup Medical SE on October 25, 2024 and sell it today you would earn a total of 52.00 from holding CompuGroup Medical SE or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical SE vs. MELIA HOTELS
Performance |
| Timeline |
| CompuGroup Medical |
| MELIA HOTELS |
CompuGroup Medical and MELIA HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and MELIA HOTELS
The main advantage of trading using opposite CompuGroup Medical and MELIA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, MELIA HOTELS 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 MELIA HOTELS will offset losses from the drop in MELIA HOTELS's long position.| CompuGroup Medical vs. USWE SPORTS AB | CompuGroup Medical vs. Columbia Sportswear | CompuGroup Medical vs. United Insurance Holdings | CompuGroup Medical vs. CullenFrost Bankers |
| MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Apple Inc | MELIA HOTELS vs. Apple Inc |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |