Correlation Between CompuGroup Medical and Waste Management
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Waste Management 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 Waste Management 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 Waste Management, you can compare the effects of market volatilities on CompuGroup Medical and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Waste Management.
Diversification Opportunities for CompuGroup Medical and Waste Management
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CompuGroup and Waste is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Waste Management go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Waste Management
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to generate 2.09 times more return on investment than Waste Management. However, CompuGroup Medical is 2.09 times more volatile than Waste Management. It trades about 0.26 of its potential returns per unit of risk. Waste Management is currently generating about 0.33 per unit of risk. If you would invest 1,378 in CompuGroup Medical SE on September 2, 2024 and sell it today you would earn a total of 213.00 from holding CompuGroup Medical SE or generate 15.46% 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. Waste Management
Performance |
| Timeline |
| CompuGroup Medical |
| Waste Management |
CompuGroup Medical and Waste Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Waste Management
The main advantage of trading using opposite CompuGroup Medical and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management's long position.| CompuGroup Medical vs. CARSALESCOM | CompuGroup Medical vs. INTER CARS SA | CompuGroup Medical vs. CarsalesCom | CompuGroup Medical vs. Geely Automobile Holdings |
| Waste Management vs. SIVERS SEMICONDUCTORS AB | Waste Management vs. Darden Restaurants | Waste Management vs. Reliance Steel Aluminum | Waste Management vs. Q2M Managementberatung AG |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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