Correlation Between CompuGroup Medical and TFS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and TFS FINANCIAL 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 TFS FINANCIAL 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 TFS FINANCIAL, you can compare the effects of market volatilities on CompuGroup Medical and TFS FINANCIAL 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 TFS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and TFS FINANCIAL.
Diversification Opportunities for CompuGroup Medical and TFS FINANCIAL
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CompuGroup and TFS is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS FINANCIAL 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 TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and TFS FINANCIAL go up and down completely randomly.
Pair Corralation between CompuGroup Medical and TFS FINANCIAL
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to generate 1.0 times more return on investment than TFS FINANCIAL. However, CompuGroup Medical SE is 1.0 times less risky than TFS FINANCIAL. It trades about 0.31 of its potential returns per unit of risk. TFS FINANCIAL is currently generating about 0.23 per unit of risk. If you would invest 1,351 in CompuGroup Medical SE on September 3, 2024 and sell it today you would earn a total of 240.00 from holding CompuGroup Medical SE or generate 17.76% 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. TFS FINANCIAL
Performance |
| Timeline |
| CompuGroup Medical |
| TFS FINANCIAL |
CompuGroup Medical and TFS FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and TFS FINANCIAL
The main advantage of trading using opposite CompuGroup Medical and TFS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, TFS FINANCIAL 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 TFS FINANCIAL will offset losses from the drop in TFS FINANCIAL's long position.| CompuGroup Medical vs. DOCDATA | CompuGroup Medical vs. DATAGROUP SE | CompuGroup Medical vs. AECOM TECHNOLOGY | CompuGroup Medical vs. Hyrican Informationssysteme Aktiengesellschaft |
| TFS FINANCIAL vs. Gladstone Investment | TFS FINANCIAL vs. Infrastrutture Wireless Italiane | TFS FINANCIAL vs. WillScot Mobile Mini | TFS FINANCIAL vs. HK Electric Investments |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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