Correlation Between Wayside Technology and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Wayside Technology 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 Wayside Technology and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wayside Technology Group and CompuGroup Medical SE, you can compare the effects of market volatilities on Wayside Technology 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 Wayside Technology with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wayside Technology and CompuGroup Medical.
Diversification Opportunities for Wayside Technology and CompuGroup Medical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wayside and CompuGroup is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Wayside Technology Group and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Wayside Technology 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 Wayside Technology Group 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 Wayside Technology i.e., Wayside Technology and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Wayside Technology and CompuGroup Medical
Assuming the 90 days horizon Wayside Technology Group is expected to generate 0.66 times more return on investment than CompuGroup Medical. However, Wayside Technology Group is 1.52 times less risky than CompuGroup Medical. It trades about 0.26 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about 0.17 per unit of risk. If you would invest 7,839 in Wayside Technology Group on September 12, 2024 and sell it today you would earn a total of 4,961 from holding Wayside Technology Group or generate 63.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wayside Technology Group vs. CompuGroup Medical SE
Performance |
| Timeline |
| Wayside Technology |
| CompuGroup Medical |
Wayside Technology and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wayside Technology and CompuGroup Medical
The main advantage of trading using opposite Wayside Technology and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wayside Technology 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.| Wayside Technology vs. QURATE RETAIL INC | Wayside Technology vs. JAPAN TOBACCO UNSPADR12 | Wayside Technology vs. MARKET VECTR RETAIL | Wayside Technology vs. China Resources Beer |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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