Correlation Between CompuGroup Medical and Digital Turbine

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

Diversification Opportunities for CompuGroup Medical and Digital Turbine

0.31

Correlation Coefficient

CompuGroup Medical  Digital Turbine

Weak diversification

The 3 months correlation between CompuGroup and Digital is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Digital Turbine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Turbine 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 Digital Turbine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Turbine has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Digital Turbine go up and down completely randomly.

Pair Corralation between CompuGroup Medical and Digital Turbine

Assuming the 90 days trading horizon CompuGroup Medical is expected to generate 22.13 times less return on investment than Digital Turbine. But when comparing it to its historical volatility, CompuGroup Medical SE is 15.37 times less risky than Digital Turbine. It trades about 0.08 of its potential returns per unit of risk. Digital Turbine is currently generating about 0.12 of returns per unit of risk over similar time horizon. 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

CompuGroup Medical SE  vs.  Digital Turbine

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.

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.

Pair Trading with CompuGroup Medical and Digital Turbine

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

The idea behind CompuGroup Medical SE and Digital Turbine 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.