Correlation Between CompuGroup Medical and Boeing

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

Diversification Opportunities for CompuGroup Medical and Boeing

0.0

Correlation Coefficient

CompuGroup Medical  Boeing

Pay attention - limited upside

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

Pair Corralation between CompuGroup Medical and Boeing

Assuming the 90 days trading horizon CompuGroup Medical SE is expected to generate 0.34 times more return on investment than Boeing. However, CompuGroup Medical SE is 2.94 times less risky than Boeing. It trades about 0.07 of its potential returns per unit of risk. The Boeing is currently generating about -0.01 per unit of risk. If you would invest  2,176  in CompuGroup Medical SE on December 24, 2024 and sell it today you would earn a total of  74.00  from holding CompuGroup Medical SE or generate 3.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CompuGroup Medical SE  vs.  The Boeing

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 5 (%) 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.

Boeing

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Boeing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Boeing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CompuGroup Medical and Boeing

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

The idea behind CompuGroup Medical SE and The Boeing 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.