Correlation Between CompuGroup Medical and Uniper SE

Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Uniper SE 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 CompuGroup Medical and Uniper SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CompuGroup Medical AG and Uniper SE, you can compare the effects of market volatilities on CompuGroup Medical and Uniper SE 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 CompuGroup Medical with a short position of Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Uniper SE.

Diversification Opportunities for CompuGroup Medical and Uniper SE

-0.24

Correlation Coefficient

CompuGroup Medical  Uniper SE

Very good diversification

The 3 months correlation between CompuGroup and Uniper is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and CompuGroup Medical 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 CompuGroup Medical AG are associated (or correlated) with Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Uniper SE go up and down completely randomly.

Pair Corralation between CompuGroup Medical and Uniper SE

Assuming the 90 days trading horizon CompuGroup Medical AG is expected to generate 0.73 times more return on investment than Uniper SE. However, CompuGroup Medical AG is 1.37 times less risky than Uniper SE. It trades about 0.05 of its potential returns per unit of risk. Uniper SE is currently generating about 0.02 per unit of risk. If you would invest  1,520  in CompuGroup Medical AG on September 2, 2024 and sell it today you would earn a total of  75.00  from holding CompuGroup Medical AG or generate 4.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CompuGroup Medical AG  vs.  Uniper SE

CompuGroup Medical

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CompuGroup Medical AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CompuGroup Medical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Uniper SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Uniper SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Uniper SE is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CompuGroup Medical and Uniper SE

The main advantage of trading using opposite CompuGroup Medical and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE's long position.

The idea behind CompuGroup Medical AG and Uniper 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.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.