Correlation Between Infrastrutture Wireless and CompuGroup Medical

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Can any of the company-specific risk be diversified away by investing in both Infrastrutture Wireless 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 Infrastrutture Wireless and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infrastrutture Wireless Italiane and CompuGroup Medical AG, you can compare the effects of market volatilities on Infrastrutture Wireless 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 Infrastrutture Wireless with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infrastrutture Wireless and CompuGroup Medical.

Diversification Opportunities for Infrastrutture Wireless and CompuGroup Medical

InfrastruttureCompuGroupDiversified AwayInfrastruttureCompuGroupDiversified Away100%
-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Infrastrutture and CompuGroup is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Infrastrutture Wireless Italia and CompuGroup Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Infrastrutture Wireless 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 Infrastrutture Wireless Italiane 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 Infrastrutture Wireless i.e., Infrastrutture Wireless and CompuGroup Medical go up and down completely randomly.

Pair Corralation between Infrastrutture Wireless and CompuGroup Medical

Assuming the 90 days trading horizon Infrastrutture Wireless Italiane is expected to under-perform the CompuGroup Medical. But the stock apears to be less risky and, when comparing its historical volatility, Infrastrutture Wireless Italiane is 1.82 times less risky than CompuGroup Medical. The stock trades about -0.13 of its potential returns per unit of risk. The CompuGroup Medical AG is currently generating about 0.05 of returns per unit of risk over similar time horizon. 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 Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Infrastrutture Wireless Italia  vs.  CompuGroup Medical AG

 Performance 
JavaScript chart by amCharts 3.21.15SepOctNov -10-50
JavaScript chart by amCharts 3.21.150R8S 0MSD
       Timeline  
Infrastrutture Wireless 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Infrastrutture Wireless Italiane 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec9.51010.511
CompuGroup Medical 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec13.51414.51515.516

Infrastrutture Wireless and CompuGroup Medical Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.99-1.53-1.07-0.61-0.150.240.71.161.622.08 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.150R8S 0MSD
       Returns  

Pair Trading with Infrastrutture Wireless and CompuGroup Medical

The main advantage of trading using opposite Infrastrutture Wireless and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infrastrutture Wireless 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 Infrastrutture Wireless Italiane and CompuGroup Medical AG 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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