Correlation Between CompuGroup Medical and Wayside Technology
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Wayside Technology 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 Wayside Technology 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 Wayside Technology Group, you can compare the effects of market volatilities on CompuGroup Medical and Wayside Technology 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 Wayside Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Wayside Technology.
Diversification Opportunities for CompuGroup Medical and Wayside Technology
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CompuGroup and Wayside is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Wayside Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayside Technology 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 Wayside Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayside Technology has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Wayside Technology go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Wayside Technology
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to under-perform the Wayside Technology. But the stock apears to be less risky and, when comparing its historical volatility, CompuGroup Medical SE is 1.16 times less risky than Wayside Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Wayside Technology Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,024 in Wayside Technology Group on September 4, 2024 and sell it today you would earn a total of 9,576 from holding Wayside Technology Group or generate 316.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
CompuGroup Medical SE vs. Wayside Technology Group
Performance |
| Timeline |
| CompuGroup Medical |
| Wayside Technology |
CompuGroup Medical and Wayside Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Wayside Technology
The main advantage of trading using opposite CompuGroup Medical and Wayside Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Wayside Technology 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 Wayside Technology will offset losses from the drop in Wayside Technology's long position.| CompuGroup Medical vs. ZURICH INSURANCE GROUP | CompuGroup Medical vs. LION ONE METALS | CompuGroup Medical vs. Singapore Reinsurance | CompuGroup Medical vs. REVO INSURANCE SPA |
| Wayside Technology vs. MCEWEN MINING INC | Wayside Technology vs. COMBA TELECOM SYST | Wayside Technology vs. Consolidated Communications Holdings | Wayside Technology vs. Tower One Wireless |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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