Correlation Between Ecofin Global and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Ecofin Global 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 Ecofin Global and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofin Global Utilities and CompuGroup Medical AG, you can compare the effects of market volatilities on Ecofin Global 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 Ecofin Global with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofin Global and CompuGroup Medical.
Diversification Opportunities for Ecofin Global and CompuGroup Medical
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ecofin and CompuGroup is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ecofin Global Utilities and CompuGroup Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Ecofin Global 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 Ecofin Global Utilities 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 Ecofin Global i.e., Ecofin Global and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Ecofin Global and CompuGroup Medical
Assuming the 90 days trading horizon Ecofin Global is expected to generate 4.07 times less return on investment than CompuGroup Medical. But when comparing it to its historical volatility, Ecofin Global Utilities is 1.83 times less risky than CompuGroup Medical. It trades about 0.06 of its potential returns per unit of risk. CompuGroup Medical AG is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,535 in CompuGroup Medical AG on September 12, 2024 and sell it today you would earn a total of 87.00 from holding CompuGroup Medical AG or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecofin Global Utilities vs. CompuGroup Medical AG
Performance |
| Timeline |
| Ecofin Global Utilities |
| CompuGroup Medical |
Ecofin Global and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofin Global and CompuGroup Medical
The main advantage of trading using opposite Ecofin Global and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofin Global 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.| Ecofin Global vs. Samsung Electronics Co | Ecofin Global vs. Samsung Electronics Co | Ecofin Global vs. Hyundai Motor | Ecofin Global vs. Toyota Motor Corp |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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