Correlation Between Compugroup Medical and Shionogi

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

Diversification Opportunities for Compugroup Medical and Shionogi

0.61

Correlation Coefficient

Compugroup Medical  Shionogi

Poor diversification

The 3 months correlation between Compugroup and Shionogi is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Compugroup Medical SE and Shionogi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shionogi 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 Shionogi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shionogi has no effect on the direction of Compugroup Medical i.e., Compugroup Medical and Shionogi go up and down completely randomly.

Pair Corralation between Compugroup Medical and Shionogi

Assuming the 90 days horizon Compugroup Medical is expected to generate 2.22 times less return on investment than Shionogi. But when comparing it to its historical volatility, Compugroup Medical SE is 3.47 times less risky than Shionogi. It trades about 0.23 of its potential returns per unit of risk. Shionogi Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,270  in Shionogi Co on October 23, 2024 and sell it today you would earn a total of  50.00  from holding Shionogi Co or generate 3.94% return on investment over 90 days.

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

Compugroup Medical SE  vs.  Shionogi Co

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 unsteady basic indicators, Compugroup Medical reported solid returns over the last few months and may actually be approaching a breakup point.

Shionogi

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shionogi Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Shionogi reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compugroup Medical and Shionogi

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

The idea behind Compugroup Medical SE and Shionogi Co 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.