Correlation Between Japan Medical and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Japan Medical 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 Japan Medical and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Medical Dynamic and CompuGroup Medical SE, you can compare the effects of market volatilities on Japan Medical 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 Japan Medical with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Medical and CompuGroup Medical.
Diversification Opportunities for Japan Medical and CompuGroup Medical
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Japan and CompuGroup is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Japan Medical Dynamic and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Japan Medical 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 Japan Medical Dynamic 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 Japan Medical i.e., Japan Medical and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Japan Medical and CompuGroup Medical
Assuming the 90 days horizon Japan Medical Dynamic is expected to generate 4.74 times more return on investment than CompuGroup Medical. However, Japan Medical is 4.74 times more volatile than CompuGroup Medical SE. It trades about 0.22 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about 0.29 per unit of risk. If you would invest 342.00 in Japan Medical Dynamic on October 24, 2024 and sell it today you would earn a total of 28.00 from holding Japan Medical Dynamic or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Medical Dynamic vs. CompuGroup Medical SE
Performance |
| Timeline |
| Japan Medical Dynamic |
| CompuGroup Medical |
Japan Medical and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Medical and CompuGroup Medical
The main advantage of trading using opposite Japan Medical and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Medical 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.| Japan Medical vs. Abbott Laboratories | Japan Medical vs. Abbott Laboratories | Japan Medical vs. Medtronic PLC | Japan Medical vs. Stryker |
| CompuGroup Medical vs. Evolent Health | CompuGroup Medical vs. Compugroup Medical SE | CompuGroup Medical vs. Superior Plus Corp | CompuGroup Medical vs. Intel |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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