Correlation Between TRAVEL + and Compugroup Medical
Can any of the company-specific risk be diversified away by investing in both TRAVEL + 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 TRAVEL + and Compugroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and Compugroup Medical SE, you can compare the effects of market volatilities on TRAVEL + 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 TRAVEL + with a short position of Compugroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL + and Compugroup Medical.
Diversification Opportunities for TRAVEL + and Compugroup Medical
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TRAVEL and Compugroup is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 and Compugroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugroup Medical and TRAVEL + 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 TRAVEL LEISURE DL 01 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 TRAVEL + i.e., TRAVEL + and Compugroup Medical go up and down completely randomly.
Pair Corralation between TRAVEL + and Compugroup Medical
Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to under-perform the Compugroup Medical. In addition to that, TRAVEL + is 1.7 times more volatile than Compugroup Medical SE. It trades about -0.1 of its total potential returns per unit of risk. Compugroup Medical SE is currently generating about 0.17 per unit of volatility. If you would invest 2,156 in Compugroup Medical SE on October 14, 2024 and sell it today you would earn a total of 44.00 from holding Compugroup Medical SE or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRAVEL LEISURE DL 01 vs. Compugroup Medical SE
Performance |
| Timeline |
| TRAVEL LEISURE DL |
| Compugroup Medical |
TRAVEL + and Compugroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAVEL + and Compugroup Medical
The main advantage of trading using opposite TRAVEL + and Compugroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVEL + 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.The idea behind TRAVEL LEISURE DL 01 and Compugroup Medical SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Compugroup Medical vs. PLAYTECH | Compugroup Medical vs. ANTA SPORTS PRODUCT | Compugroup Medical vs. TRAVEL LEISURE DL 01 | Compugroup Medical vs. Thai Beverage Public |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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