Correlation Between Tungsten West and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Tungsten West 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 Tungsten West and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tungsten West PLC and CompuGroup Medical AG, you can compare the effects of market volatilities on Tungsten West 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 Tungsten West with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tungsten West and CompuGroup Medical.
Diversification Opportunities for Tungsten West and CompuGroup Medical
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tungsten and CompuGroup is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Tungsten West PLC and CompuGroup Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Tungsten West 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 Tungsten West PLC 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 Tungsten West i.e., Tungsten West and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Tungsten West and CompuGroup Medical
Assuming the 90 days trading horizon Tungsten West PLC is expected to generate 3.26 times more return on investment than CompuGroup Medical. However, Tungsten West is 3.26 times more volatile than CompuGroup Medical AG. It trades about 0.03 of its potential returns per unit of risk. CompuGroup Medical AG is currently generating about -0.09 per unit of risk. If you would invest 350.00 in Tungsten West PLC on September 2, 2024 and sell it today you would lose (50.00) from holding Tungsten West PLC or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tungsten West PLC vs. CompuGroup Medical AG
Performance |
| Timeline |
| Tungsten West PLC |
| CompuGroup Medical |
Tungsten West and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tungsten West and CompuGroup Medical
The main advantage of trading using opposite Tungsten West and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tungsten West 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.| Tungsten West vs. Verizon Communications | Tungsten West vs. Fortune Brands Home | Tungsten West vs. Infrastrutture Wireless Italiane | Tungsten West vs. Home Depot |
| CompuGroup Medical vs. Uniper SE | CompuGroup Medical vs. Mulberry Group PLC | CompuGroup Medical vs. London Security Plc | CompuGroup Medical vs. Triad Group PLC |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |