Correlation Between FORMPIPE SOFTWARE and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FORMPIPE SOFTWARE AB and CompuGroup Medical SE, you can compare the effects of market volatilities on FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORMPIPE SOFTWARE and CompuGroup Medical.
Diversification Opportunities for FORMPIPE SOFTWARE and CompuGroup Medical
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FORMPIPE and CompuGroup is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding FORMPIPE SOFTWARE AB and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB 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 FORMPIPE SOFTWARE i.e., FORMPIPE SOFTWARE and CompuGroup Medical go up and down completely randomly.
Pair Corralation between FORMPIPE SOFTWARE and CompuGroup Medical
Assuming the 90 days horizon FORMPIPE SOFTWARE AB is expected to generate 0.9 times more return on investment than CompuGroup Medical. However, FORMPIPE SOFTWARE AB is 1.12 times less risky than CompuGroup Medical. It trades about 0.04 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about -0.08 per unit of risk. If you would invest 163.00 in FORMPIPE SOFTWARE AB on August 27, 2024 and sell it today you would earn a total of 49.00 from holding FORMPIPE SOFTWARE AB or generate 30.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORMPIPE SOFTWARE AB vs. CompuGroup Medical SE
Performance |
| Timeline |
| FORMPIPE SOFTWARE |
| CompuGroup Medical |
FORMPIPE SOFTWARE and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORMPIPE SOFTWARE and CompuGroup Medical
The main advantage of trading using opposite FORMPIPE SOFTWARE and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORMPIPE SOFTWARE 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.| FORMPIPE SOFTWARE vs. Nemetschek AG ON | FORMPIPE SOFTWARE vs. Superior Plus Corp | FORMPIPE SOFTWARE vs. NMI Holdings | FORMPIPE SOFTWARE vs. Origin Agritech |
| CompuGroup Medical vs. Superior Plus Corp | CompuGroup Medical vs. NMI Holdings | CompuGroup Medical vs. Origin Agritech | CompuGroup Medical vs. SIVERS SEMICONDUCTORS AB |
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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