Correlation Between Nanjing Panda and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Nanjing Panda 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 Nanjing Panda and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanjing Panda Electronics and CompuGroup Medical SE, you can compare the effects of market volatilities on Nanjing Panda 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 Nanjing Panda with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Panda and CompuGroup Medical.
Diversification Opportunities for Nanjing Panda and CompuGroup Medical
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nanjing and CompuGroup is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Panda Electronics and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Nanjing Panda 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 Nanjing Panda Electronics 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 Nanjing Panda i.e., Nanjing Panda and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Nanjing Panda and CompuGroup Medical
Assuming the 90 days horizon Nanjing Panda Electronics is expected to generate 2.23 times more return on investment than CompuGroup Medical. However, Nanjing Panda is 2.23 times more volatile than CompuGroup Medical SE. It trades about 0.03 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about -0.03 per unit of risk. If you would invest 36.00 in Nanjing Panda Electronics on October 14, 2024 and sell it today you would lose (3.00) from holding Nanjing Panda Electronics or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nanjing Panda Electronics vs. CompuGroup Medical SE
Performance |
| Timeline |
| Nanjing Panda Electronics |
| CompuGroup Medical |
Nanjing Panda and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Panda and CompuGroup Medical
The main advantage of trading using opposite Nanjing Panda and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Panda 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.| Nanjing Panda vs. UNIDOC HEALTH P | Nanjing Panda vs. EPSILON HEALTHCARE LTD | Nanjing Panda vs. NIGHTINGALE HEALTH EO | Nanjing Panda vs. PPHE HOTEL GROUP |
| CompuGroup Medical vs. PT Wintermar Offshore | CompuGroup Medical vs. ELECTRONIC ARTS | CompuGroup Medical vs. Renesas Electronics | CompuGroup Medical vs. Nanjing Panda Electronics |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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