Correlation Between Elis SA and COMPUGROUP MEDSPADR

Can any of the company-specific risk be diversified away by investing in both Elis SA and COMPUGROUP MEDSPADR 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 Elis SA and COMPUGROUP MEDSPADR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Elis SA and COMPUGROUP MEDSPADR 1, you can compare the effects of market volatilities on Elis SA and COMPUGROUP MEDSPADR 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 Elis SA with a short position of COMPUGROUP MEDSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elis SA and COMPUGROUP MEDSPADR.

Diversification Opportunities for Elis SA and COMPUGROUP MEDSPADR

-0.7

Correlation Coefficient

Elis SA  COMPUGROUP MEDSPADR

Excellent diversification

The 3 months correlation between Elis and COMPUGROUP is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Elis SA and COMPUGROUP MEDSPADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPUGROUP MEDSPADR and Elis SA 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 Elis SA are associated (or correlated) with COMPUGROUP MEDSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPUGROUP MEDSPADR has no effect on the direction of Elis SA i.e., Elis SA and COMPUGROUP MEDSPADR go up and down completely randomly.

Pair Corralation between Elis SA and COMPUGROUP MEDSPADR

Assuming the 90 days horizon Elis SA is expected to under-perform the COMPUGROUP MEDSPADR. But the stock apears to be less risky and, when comparing its historical volatility, Elis SA is 2.84 times less risky than COMPUGROUP MEDSPADR. The stock trades about -0.01 of its potential returns per unit of risk. The COMPUGROUP MEDSPADR 1 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,340  in COMPUGROUP MEDSPADR 1 on October 13, 2024 and sell it today you would lose (140.00) from holding COMPUGROUP MEDSPADR 1 or give up 5.98% of portfolio value over 90 days.

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

Elis SA  vs.  COMPUGROUP MEDSPADR 1

Elis SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elis SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Elis SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

COMPUGROUP MEDSPADR

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUGROUP MEDSPADR 1 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COMPUGROUP MEDSPADR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elis SA and COMPUGROUP MEDSPADR

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

The idea behind Elis SA and COMPUGROUP MEDSPADR 1 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..