Correlation Between SPORTING and Compugroup Medical
Can any of the company-specific risk be diversified away by investing in both SPORTING 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 SPORTING and Compugroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and Compugroup Medical SE, you can compare the effects of market volatilities on SPORTING 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 SPORTING with a short position of Compugroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and Compugroup Medical.
Diversification Opportunities for SPORTING and Compugroup Medical
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPORTING and Compugroup is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING and Compugroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugroup Medical and SPORTING 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 SPORTING 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 SPORTING i.e., SPORTING and Compugroup Medical go up and down completely randomly.
Pair Corralation between SPORTING and Compugroup Medical
Assuming the 90 days trading horizon SPORTING is expected to under-perform the Compugroup Medical. In addition to that, SPORTING is 8.69 times more volatile than Compugroup Medical SE. It trades about -0.11 of its total potential returns per unit of risk. Compugroup Medical SE is currently generating about 0.11 per unit of volatility. If you would invest 2,170 in Compugroup Medical SE on October 13, 2024 and sell it today you would earn a total of 30.00 from holding Compugroup Medical SE or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORTING vs. Compugroup Medical SE
Performance |
| Timeline |
| SPORTING |
| Compugroup Medical |
SPORTING and Compugroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORTING and Compugroup Medical
The main advantage of trading using opposite SPORTING and Compugroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING 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.| SPORTING vs. Insteel Industries | SPORTING vs. PT Steel Pipe | SPORTING vs. Taylor Morrison Home | SPORTING vs. Schnitzer Steel Industries |
| Compugroup Medical vs. Yuexiu Transport Infrastructure | Compugroup Medical vs. PennantPark Investment | Compugroup Medical vs. SLR Investment Corp | Compugroup Medical vs. SPORTING |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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