Correlation Between CompuGroup Medical and DICKER DATA

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

Diversification Opportunities for CompuGroup Medical and DICKER DATA

-0.58

Correlation Coefficient

CompuGroup Medical  DICKER DATA

Excellent diversification

The 3 months correlation between CompuGroup and DICKER is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and DICKER DATA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKER DATA LTD 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 DICKER DATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKER DATA LTD has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and DICKER DATA go up and down completely randomly.

Pair Corralation between CompuGroup Medical and DICKER DATA

Assuming the 90 days trading horizon CompuGroup Medical SE is expected to under-perform the DICKER DATA. In addition to that, CompuGroup Medical is 1.57 times more volatile than DICKER DATA LTD. It trades about -0.03 of its total potential returns per unit of risk. DICKER DATA LTD is currently generating about -0.03 per unit of volatility. If you would invest  647.00  in DICKER DATA LTD on October 5, 2024 and sell it today you would lose (147.00) from holding DICKER DATA LTD or give up 22.72% of portfolio value over 90 days.

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

CompuGroup Medical SE  vs.  DICKER DATA LTD

CompuGroup Medical

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days CompuGroup Medical SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively unsteady basic indicators, CompuGroup Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

DICKER DATA LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DICKER DATA LTD 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 DICKER DATA

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

The idea behind CompuGroup Medical SE and DICKER DATA LTD 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.