Correlation Between Digital Turbine and CompuGroup Medical

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

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

Diversification Opportunities for Digital Turbine and CompuGroup Medical

0.31

Correlation Coefficient

Digital Turbine  CompuGroup Medical

Weak diversification

The 3 months correlation between Digital and CompuGroup is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Digital Turbine and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Digital Turbine 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 Digital Turbine 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 Digital Turbine i.e., Digital Turbine and CompuGroup Medical go up and down completely randomly.

Pair Corralation between Digital Turbine and CompuGroup Medical

Assuming the 90 days horizon Digital Turbine is expected to generate 15.37 times more return on investment than CompuGroup Medical. However, Digital Turbine is 15.37 times more volatile than CompuGroup Medical SE. It trades about 0.12 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about 0.08 per unit of risk. If you would invest  188.00  in Digital Turbine on December 25, 2024 and sell it today you would earn a total of  142.00  from holding Digital Turbine or generate 75.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Digital Turbine  vs.  CompuGroup Medical SE

Digital Turbine

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Digital Turbine are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Digital Turbine reported solid returns over the last few months and may actually be approaching a breakup point.

CompuGroup Medical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CompuGroup Medical SE are ranked lower than 6 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Digital Turbine and CompuGroup Medical

The main advantage of trading using opposite Digital Turbine and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Turbine 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 Digital Turbine 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.