Correlation Between CompuGroup Medical and Regions Financial
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Regions 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 Regions 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 Regions Financial, you can compare the effects of market volatilities on CompuGroup Medical and Regions 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 Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Regions Financial.
Diversification Opportunities for CompuGroup Medical and Regions Financial
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CompuGroup and Regions is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Regions Financial go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Regions Financial
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to generate 0.97 times more return on investment than Regions Financial. However, CompuGroup Medical SE is 1.03 times less risky than Regions Financial. It trades about 0.29 of its potential returns per unit of risk. Regions Financial is currently generating about 0.25 per unit of risk. If you would invest 1,361 in CompuGroup Medical SE on September 1, 2024 and sell it today you would earn a total of 230.00 from holding CompuGroup Medical SE or generate 16.9% 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. Regions Financial
Performance |
| Timeline |
| CompuGroup Medical |
| Regions Financial |
CompuGroup Medical and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Regions Financial
The main advantage of trading using opposite CompuGroup Medical and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Regions 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 Regions Financial will offset losses from the drop in Regions Financial's long position.| CompuGroup Medical vs. LION ONE METALS | CompuGroup Medical vs. Jacquet Metal Service | CompuGroup Medical vs. ARROW ELECTRONICS | CompuGroup Medical vs. LG Electronics |
| Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Superior Plus Corp | Regions Financial vs. Origin Agritech | Regions Financial vs. Identiv |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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