Correlation Between NESTE OYJ and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both NESTE OYJ 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 NESTE OYJ and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NESTE OYJ UNSPADR and CompuGroup Medical SE, you can compare the effects of market volatilities on NESTE OYJ 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 NESTE OYJ with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESTE OYJ and CompuGroup Medical.
Diversification Opportunities for NESTE OYJ and CompuGroup Medical
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NESTE and CompuGroup is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding NESTE OYJ UNSPADR and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and NESTE OYJ 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 NESTE OYJ UNSPADR 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 NESTE OYJ i.e., NESTE OYJ and CompuGroup Medical go up and down completely randomly.
Pair Corralation between NESTE OYJ and CompuGroup Medical
Assuming the 90 days trading horizon NESTE OYJ UNSPADR is expected to under-perform the CompuGroup Medical. But the stock apears to be less risky and, when comparing its historical volatility, NESTE OYJ UNSPADR is 1.01 times less risky than CompuGroup Medical. The stock trades about -0.07 of its potential returns per unit of risk. The CompuGroup Medical SE is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 3,623 in CompuGroup Medical SE on September 5, 2024 and sell it today you would lose (1,933) from holding CompuGroup Medical SE or give up 53.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NESTE OYJ UNSPADR vs. CompuGroup Medical SE
Performance |
| Timeline |
| NESTE OYJ UNSPADR |
| CompuGroup Medical |
NESTE OYJ and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NESTE OYJ and CompuGroup Medical
The main advantage of trading using opposite NESTE OYJ and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NESTE OYJ 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.| NESTE OYJ vs. WisdomTree Investments | NESTE OYJ vs. JJ SNACK FOODS | NESTE OYJ vs. National Beverage Corp | NESTE OYJ vs. TYSON FOODS A |
| CompuGroup Medical vs. 10X GENOMICS DL | CompuGroup Medical vs. RLX TECH SPADR1 | CompuGroup Medical vs. Compugroup Medical SE |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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