Correlation Between CompuGroup Medical and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Evolution Mining 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 Evolution Mining 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 Evolution Mining Limited, you can compare the effects of market volatilities on CompuGroup Medical and Evolution Mining 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 Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Evolution Mining.
Diversification Opportunities for CompuGroup Medical and Evolution Mining
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CompuGroup and Evolution is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Evolution Mining go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Evolution Mining
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to generate 1.37 times more return on investment than Evolution Mining. However, CompuGroup Medical is 1.37 times more volatile than Evolution Mining Limited. It trades about 0.29 of its potential returns per unit of risk. Evolution Mining Limited is currently generating about -0.05 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical SE vs. Evolution Mining Limited
Performance |
| Timeline |
| CompuGroup Medical |
| Evolution Mining |
CompuGroup Medical and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Evolution Mining
The main advantage of trading using opposite CompuGroup Medical and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining'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 |
| Evolution Mining vs. Mitsubishi Gas Chemical | Evolution Mining vs. Shin Etsu Chemical Co | Evolution Mining vs. Siamgas And Petrochemicals | Evolution Mining vs. Tyson Foods |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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