Correlation Between CompuGroup Medical and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and TRADEGATE 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 TRADEGATE 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 TRADEGATE, you can compare the effects of market volatilities on CompuGroup Medical and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and TRADEGATE.
Diversification Opportunities for CompuGroup Medical and TRADEGATE
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CompuGroup and TRADEGATE is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and TRADEGATE go up and down completely randomly.
Pair Corralation between CompuGroup Medical and TRADEGATE
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to under-perform the TRADEGATE. In addition to that, CompuGroup Medical is 3.47 times more volatile than TRADEGATE. It trades about -0.03 of its total potential returns per unit of risk. TRADEGATE is currently generating about -0.04 per unit of volatility. If you would invest 10,744 in TRADEGATE on December 10, 2024 and sell it today you would lose (1,694) from holding TRADEGATE or give up 15.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical SE vs. TRADEGATE
Performance |
| Timeline |
| CompuGroup Medical |
| TRADEGATE |
CompuGroup Medical and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and TRADEGATE
The main advantage of trading using opposite CompuGroup Medical and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE's long position.| CompuGroup Medical vs. BRIT AMER TOBACCO | CompuGroup Medical vs. Applied Materials | CompuGroup Medical vs. SANOK RUBBER ZY | CompuGroup Medical vs. Martin Marietta Materials |
| TRADEGATE vs. REVO INSURANCE SPA | TRADEGATE vs. Cembra Money Bank | TRADEGATE vs. Chiba Bank | TRADEGATE vs. BANK OF CHINA |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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