Correlation Between CompuGroup Medical and Vienna Insurance

Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Vienna Insurance 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 Vienna Insurance 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 Vienna Insurance Group, you can compare the effects of market volatilities on CompuGroup Medical and Vienna Insurance 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 Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Vienna Insurance.

Diversification Opportunities for CompuGroup Medical and Vienna Insurance

-0.12

Correlation Coefficient

CompuGroup Medical  Vienna Insurance

Good diversification

The 3 months correlation between CompuGroup and Vienna is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance 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 Vienna Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vienna Insurance has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Vienna Insurance go up and down completely randomly.

Pair Corralation between CompuGroup Medical and Vienna Insurance

Assuming the 90 days trading horizon CompuGroup Medical AG is expected to generate 2.21 times more return on investment than Vienna Insurance. However, CompuGroup Medical is 2.21 times more volatile than Vienna Insurance Group. It trades about 0.05 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about -0.12 per unit of risk. If you would invest  1,463  in CompuGroup Medical AG on September 4, 2024 and sell it today you would earn a total of  86.00  from holding CompuGroup Medical AG or generate 5.88% 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.  Vienna Insurance Group

CompuGroup Medical

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CompuGroup Medical AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CompuGroup Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vienna Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vienna Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with CompuGroup Medical and Vienna Insurance

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

The idea behind CompuGroup Medical AG and Vienna Insurance Group 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.