Correlation Between DFS Furniture and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and CompuGroup Medical 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 DFS Furniture and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and CompuGroup Medical AG, you can compare the effects of market volatilities on DFS Furniture and CompuGroup Medical 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 DFS Furniture with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and CompuGroup Medical.
Diversification Opportunities for DFS Furniture and CompuGroup Medical
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between DFS and CompuGroup is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and CompuGroup Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and DFS Furniture 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 DFS Furniture PLC are associated (or correlated) with CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of DFS Furniture i.e., DFS Furniture and CompuGroup Medical go up and down completely randomly.
Pair Corralation between DFS Furniture and CompuGroup Medical
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 0.87 times more return on investment than CompuGroup Medical. However, DFS Furniture PLC is 1.15 times less risky than CompuGroup Medical. It trades about 0.01 of its potential returns per unit of risk. CompuGroup Medical AG is currently generating about -0.05 per unit of risk. If you would invest 14,064 in DFS Furniture PLC on August 30, 2024 and sell it today you would lose (364.00) from holding DFS Furniture PLC or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. CompuGroup Medical AG
Performance |
| Timeline |
| DFS Furniture PLC |
| CompuGroup Medical |
DFS Furniture and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and CompuGroup Medical
The main advantage of trading using opposite DFS Furniture and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| DFS Furniture vs. Ondine Biomedical | DFS Furniture vs. Europa Metals | DFS Furniture vs. Lendinvest PLC | DFS Furniture vs. Neometals |
| CompuGroup Medical vs. Lendinvest PLC | CompuGroup Medical vs. Neometals | CompuGroup Medical vs. Albion Technology General | CompuGroup Medical vs. Jupiter Fund Management |
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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