Correlation Between Disney and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Disney 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 Disney and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and CompuGroup Medical SE, you can compare the effects of market volatilities on Disney 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 Disney with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and CompuGroup Medical.
Diversification Opportunities for Disney and CompuGroup Medical
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Disney and CompuGroup is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Disney 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 Walt Disney 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 Disney i.e., Disney and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Disney and CompuGroup Medical
Considering the 90-day investment horizon Walt Disney is expected to generate 0.36 times more return on investment than CompuGroup Medical. However, Walt Disney is 2.81 times less risky than CompuGroup Medical. It trades about 0.05 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about -0.07 per unit of risk. If you would invest 8,905 in Walt Disney on September 12, 2024 and sell it today you would earn a total of 2,568 from holding Walt Disney or generate 28.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 55.5% |
| Values | Daily Returns |
Walt Disney vs. CompuGroup Medical SE
Performance |
| Timeline |
| Walt Disney |
| CompuGroup Medical |
Disney and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and CompuGroup Medical
The main advantage of trading using opposite Disney and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney 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.| Disney vs. Aeye Inc | Disney vs. Ep Emerging Markets | Disney vs. ALPS Emerging Sector | Disney vs. First Physicians Capital |
| CompuGroup Medical vs. Veeva Systems Class | CompuGroup Medical vs. GE HealthCare Technologies | CompuGroup Medical vs. M3 Inc | CompuGroup Medical vs. Solventum Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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