Correlation Between First Ship and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both First Ship 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 First Ship and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Ship Lease and CompuGroup Medical SE, you can compare the effects of market volatilities on First Ship 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 First Ship with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ship and CompuGroup Medical.
Diversification Opportunities for First Ship and CompuGroup Medical
-1.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and CompuGroup is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding First Ship Lease and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and First Ship 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 First Ship Lease 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 First Ship i.e., First Ship and CompuGroup Medical go up and down completely randomly.
Pair Corralation between First Ship and CompuGroup Medical
Assuming the 90 days horizon First Ship Lease is expected to generate 1.01 times more return on investment than CompuGroup Medical. However, First Ship is 1.01 times more volatile than CompuGroup Medical SE. It trades about 0.04 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about -0.05 per unit of risk. If you would invest 2.50 in First Ship Lease on September 14, 2024 and sell it today you would earn a total of 1.50 from holding First Ship Lease or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Strong |
| Accuracy | 65.25% |
| Values | Daily Returns |
First Ship Lease vs. CompuGroup Medical SE
Performance |
| Timeline |
| First Ship Lease |
| CompuGroup Medical |
First Ship and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ship and CompuGroup Medical
The main advantage of trading using opposite First Ship and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ship 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.| First Ship vs. Westrock Coffee | First Ship vs. Constellation Brands Class | First Ship vs. SkyWest | First Ship vs. The Coca Cola |
| CompuGroup Medical vs. First Ship Lease | CompuGroup Medical vs. Air Lease | CompuGroup Medical vs. ATRenew Inc DRC | CompuGroup Medical vs. Coupang LLC |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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