Correlation Between Impala Platinum and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Impala Platinum 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 Impala Platinum and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impala Platinum Holdings and CompuGroup Medical SE, you can compare the effects of market volatilities on Impala Platinum 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 Impala Platinum with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impala Platinum and CompuGroup Medical.
Diversification Opportunities for Impala Platinum and CompuGroup Medical
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Impala and CompuGroup is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Impala Platinum Holdings and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Impala Platinum 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 Impala Platinum Holdings 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 Impala Platinum i.e., Impala Platinum and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Impala Platinum and CompuGroup Medical
Assuming the 90 days trading horizon Impala Platinum Holdings is expected to generate 2.12 times more return on investment than CompuGroup Medical. However, Impala Platinum is 2.12 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 -0.02 per unit of risk. If you would invest 393.00 in Impala Platinum Holdings on September 12, 2024 and sell it today you would earn a total of 155.00 from holding Impala Platinum Holdings or generate 39.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impala Platinum Holdings vs. CompuGroup Medical SE
Performance |
| Timeline |
| Impala Platinum Holdings |
| CompuGroup Medical |
Impala Platinum and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impala Platinum and CompuGroup Medical
The main advantage of trading using opposite Impala Platinum and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impala Platinum 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.| Impala Platinum vs. YOOMA WELLNESS INC | Impala Platinum vs. MIRAMAR HOTEL INV | Impala Platinum vs. DiamondRock Hospitality | Impala Platinum vs. HYATT HOTELS A |
| CompuGroup Medical vs. Evolent Health | CompuGroup Medical vs. Compugroup Medical SE | CompuGroup Medical vs. Superior Plus Corp | CompuGroup Medical vs. NMI Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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