Correlation Between Compugroup Medical and Ping An

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

By analyzing existing cross correlation between Compugroup Medical SE and Ping An Healthcare, you can compare the effects of market volatilities on Compugroup Medical and Ping An 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 Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugroup Medical and Ping An.

Diversification Opportunities for Compugroup Medical and Ping An

-0.7

Correlation Coefficient

Compugroup Medical  Ping An

Excellent diversification

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

Pair Corralation between Compugroup Medical and Ping An

Assuming the 90 days horizon Compugroup Medical SE is expected to generate 0.72 times more return on investment than Ping An. However, Compugroup Medical SE is 1.39 times less risky than Ping An. It trades about -0.04 of its potential returns per unit of risk. Ping An Healthcare is currently generating about -0.04 per unit of risk. If you would invest  3,654  in Compugroup Medical SE on September 24, 2024 and sell it today you would lose (1,496) from holding Compugroup Medical SE or give up 40.94% of portfolio value over 90 days.

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

Compugroup Medical SE  vs.  Ping An Healthcare

Compugroup Medical

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compugroup Medical SE are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Compugroup Medical reported solid returns over the last few months and may actually be approaching a breakup point.

Ping An Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ping An Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Compugroup Medical and Ping An

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

The idea behind Compugroup Medical SE and Ping An Healthcare 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.