Correlation Between GlobalData PLC and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both GlobalData PLC 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 GlobalData PLC and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalData PLC and CompuGroup Medical AG, you can compare the effects of market volatilities on GlobalData PLC 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 GlobalData PLC with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalData PLC and CompuGroup Medical.
Diversification Opportunities for GlobalData PLC and CompuGroup Medical
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GlobalData and CompuGroup is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding GlobalData 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 GlobalData PLC 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 GlobalData 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 GlobalData PLC i.e., GlobalData PLC and CompuGroup Medical go up and down completely randomly.
Pair Corralation between GlobalData PLC and CompuGroup Medical
Assuming the 90 days trading horizon GlobalData PLC is expected to under-perform the CompuGroup Medical. But the stock apears to be less risky and, when comparing its historical volatility, GlobalData PLC is 1.11 times less risky than CompuGroup Medical. The stock trades about -0.07 of its potential returns per unit of risk. The CompuGroup Medical AG is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,369 in CompuGroup Medical AG on September 12, 2024 and sell it today you would earn a total of 253.00 from holding CompuGroup Medical AG or generate 18.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
GlobalData PLC vs. CompuGroup Medical AG
Performance |
Timeline |
GlobalData PLC |
CompuGroup Medical |
GlobalData PLC and CompuGroup Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GlobalData PLC and CompuGroup Medical
The main advantage of trading using opposite GlobalData PLC and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalData PLC 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.GlobalData PLC vs. Hong Kong Land | GlobalData PLC vs. Neometals | GlobalData PLC vs. Coor Service Management | GlobalData PLC vs. Fidelity Sustainable USD |
CompuGroup Medical vs. Hong Kong Land | CompuGroup Medical vs. Neometals | CompuGroup Medical vs. Coor Service Management | CompuGroup Medical vs. Fidelity Sustainable USD |
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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