Correlation Between ÜSTRA Hannoversche and Compugroup Medical
Can any of the company-specific risk be diversified away by investing in both ÜSTRA Hannoversche 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 ÜSTRA Hannoversche and Compugroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRA Hannoversche Verkehrsbetriebe and Compugroup Medical SE, you can compare the effects of market volatilities on ÜSTRA Hannoversche 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 ÜSTRA Hannoversche with a short position of Compugroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ÜSTRA Hannoversche and Compugroup Medical.
Diversification Opportunities for ÜSTRA Hannoversche and Compugroup Medical
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between ÜSTRA and Compugroup is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding STRA Hannoversche Verkehrsbetr and Compugroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugroup Medical and ÜSTRA Hannoversche 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 STRA Hannoversche Verkehrsbetriebe 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 ÜSTRA Hannoversche i.e., ÜSTRA Hannoversche and Compugroup Medical go up and down completely randomly.
Pair Corralation between ÜSTRA Hannoversche and Compugroup Medical
Assuming the 90 days horizon STRA Hannoversche Verkehrsbetriebe is expected to generate 1.74 times more return on investment than Compugroup Medical. However, ÜSTRA Hannoversche is 1.74 times more volatile than Compugroup Medical SE. It trades about 0.02 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 1,012 in STRA Hannoversche Verkehrsbetriebe on September 2, 2024 and sell it today you would lose (72.00) from holding STRA Hannoversche Verkehrsbetriebe or give up 7.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRA Hannoversche Verkehrsbetr vs. Compugroup Medical SE
Performance |
| Timeline |
| ÜSTRA Hannoversche |
| Compugroup Medical |
ÜSTRA Hannoversche and Compugroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ÜSTRA Hannoversche and Compugroup Medical
The main advantage of trading using opposite ÜSTRA Hannoversche and Compugroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ÜSTRA Hannoversche 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.| ÜSTRA Hannoversche vs. SCANDMEDICAL SOLDK 040 | ÜSTRA Hannoversche vs. MGIC INVESTMENT | ÜSTRA Hannoversche vs. HK Electric Investments | ÜSTRA Hannoversche vs. MEDICAL FACILITIES NEW |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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