Correlation Between Compugroup Medical and RTL GROUP

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

Diversification Opportunities for Compugroup Medical and RTL GROUP

0.0

Correlation Coefficient

Compugroup Medical  RTL GROUP

Pay attention - limited upside

The 3 months correlation between Compugroup and RTL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compugroup Medical SE and RTL GROUP UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTL GROUP UNSPADR 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 RTL GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTL GROUP UNSPADR has no effect on the direction of Compugroup Medical i.e., Compugroup Medical and RTL GROUP go up and down completely randomly.

Pair Corralation between Compugroup Medical and RTL GROUP

If you would invest  0.00  in RTL GROUP UNSPADR on October 12, 2024 and sell it today you would earn a total of  0.00  from holding RTL GROUP UNSPADR or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.2%
Values	Daily Returns

Compugroup Medical SE  vs.  RTL GROUP UNSPADR

Compugroup Medical

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compugroup Medical SE are ranked lower than 14 (%) 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.

RTL GROUP UNSPADR

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Compugroup Medical and RTL GROUP

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

The idea behind Compugroup Medical SE and RTL GROUP UNSPADR 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.