Correlation Between Gentex and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Gentex 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 Gentex and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentex and CompuGroup Medical SE, you can compare the effects of market volatilities on Gentex 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 Gentex with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and CompuGroup Medical.
Diversification Opportunities for Gentex and CompuGroup Medical
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gentex and CompuGroup is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Gentex 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 Gentex 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 Gentex i.e., Gentex and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Gentex and CompuGroup Medical
Assuming the 90 days horizon Gentex is expected to under-perform the CompuGroup Medical. But the stock apears to be less risky and, when comparing its historical volatility, Gentex is 3.02 times less risky than CompuGroup Medical. The stock trades about -0.05 of its potential returns per unit of risk. The CompuGroup Medical SE is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,482 in CompuGroup Medical SE on September 24, 2024 and sell it today you would lose (308.00) from holding CompuGroup Medical SE or give up 12.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gentex vs. CompuGroup Medical SE
Performance |
| Timeline |
| Gentex |
| CompuGroup Medical |
Gentex and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentex and CompuGroup Medical
The main advantage of trading using opposite Gentex and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex 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.| Gentex vs. CompuGroup Medical SE | Gentex vs. JJ SNACK FOODS | Gentex vs. MEDICAL FACILITIES NEW | Gentex vs. AUSNUTRIA DAIRY |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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