Correlation Between Dow Jones and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and CompuGroup Medical SE, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and CompuGroup Medical.
Diversification Opportunities for Dow Jones and CompuGroup Medical
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and CompuGroup is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Dow Jones and CompuGroup Medical
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.21 times more return on investment than CompuGroup Medical. However, Dow Jones Industrial is 4.81 times less risky than CompuGroup Medical. It trades about 0.16 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about -0.15 per unit of risk. If you would invest 3,880,733 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 610,332 from holding Dow Jones Industrial or generate 15.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. CompuGroup Medical SE
Performance |
| Timeline |
Dow Jones and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
CompuGroup Medical SE
Pair trading matchups for CompuGroup Medical
Pair Trading with Dow Jones and CompuGroup Medical
The main advantage of trading using opposite Dow Jones and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| CompuGroup Medical vs. GE HealthCare Technologies | CompuGroup Medical vs. Veeva Systems Class | CompuGroup Medical vs. Solventum Corp | CompuGroup Medical vs. Doximity |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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